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UNIVERSITY

III IIEI

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THE CONSTITUTION AND FINANCE

OF ENGLISH, SCOTTISH AND IRISH

JOINT-STOCK COMPANIES TO 1720

VOLUME III

WATER SUPPLY, POSTAL, STREET-LIGHTING, MANUFACTURING,
BANKING, FINANCE AND INSURANCE COMPANIES

ALSO STATEMENTS RELATING TO THE CROWN FINANCES

CAMBRIDGE UNIVERSITY PRESS

Eonfton: FETTER LANE, E.G.

C. F. CLAY, Manager

(fftitnburgi): loo, PRINCES STREET

aSerlm: A. ASHER AND CO.

ILetpjig: F. A. BROCKHAUS

^eia Sork: G. P. PUTNAM'S SONS

Bombag anU Calcutta: MACMILLAN AND CO., Ltd.

A// rights reserved

THE CONSTITUTION AND FINANCE

OF ENGLISH, SCOTTISH AND IRISH

JOINT-STOCK COMPANIES TO 1720

WILLIAM ROBERT SCOTT, M.A., D.Phil., Litt.D.

LECTURER IN POLITICAL ECONOMY IN THE UNIVERSITY OF ST ANDREWS

VOLUME III

WATER SUPPLY, POSTAL, StREET-LIGHTING,

MANUFACTURING, BANKING, FINANCE

AND INSURANCE COMPANIES

ALSO STATEMENTS RELATING TO THE
CROWN FINANCES

Cambridge :

at the University Press

191 1

CatnfariUgt :

PRINTED BY JOHN CLAY, M.A.
AT THE UNIVERSITY PRESS

PREFACE

r 1 1HIS volume completes Part II. of the constitutional and financial
-*- history of British joint-stock companies to 1720. In its subject-
matter it is differentiated from the second volume, in so far as in the
latter most of the undertakings described were related to the shipping
industry, whereas those, now dealt with, were mainly concerned with
commerce at home.

Perhaps the addition of the concluding division, which treats of the
Crown finances at certain periods, requires some explanation. In this
and the second volume references have been necessary to the state of the
credit of the Crown ; and, owing to the comparative treatment aimed at
in Part I., it was essential to allude frequently to these and similar
topics. It is unfortunate that there is no modern history of the
Revenue, and therefore it became necessary to provide certain illus-
trative statements of it, which, under the various qualifications mentioned
in Division xv., would bridge the gap to some extent. But to have
entered on such discussions in detail in Part I. would have been out of
place, and hence comparatively full tabular statements have been pro-
vided in this volume, so that reference from Part I. (vol. i.) to these
may be as easy as possible to the reader.

In the case of companies, which still exist, I am indebted to the
officials for information in several directions. The following accounts of
such bodies have been read either in MS. or in proof by members of the
directorate or of the staff, who have devoted special attention to the
early history of the institutions with which they are connected. In this
way, it is to be hoped that accuracy on many minor points has been
secured, but, needless to say, I am altogether responsible for the
explanations given of the phenomena. In addition there are a few

VI Preface

undertakings, no longer in existence, concerning which others have
helped me. In both these connections 1 have to thank the following
(the special assistance of each being generally mentioned in footnotes) —
Mr J. S. Barbour, Mr C. A. Denton, Mr George Hakewill, Mr Henry
J. Maguire, Mr D. McNeil, Miss Maud Sellars, Mr J. F. Stutchbury,
Mr W. N. Whymper. I have also to acknowledge the courtesy of the
proprietors of the Accountants' Magazine^ the Journal of the Royal
Society of Antiquaries of Ireland and of the Scottish Historical Review
in permitting me to reprint articles which have appeared in these
publications. These portions of the work have been in some cases
largely rewritten and in others revised and extended. I am also
indebted to the Council of the Scottish History Society for allowing
me to reprint parts of my introduction in the Records of a Scottish
Cloth Manufactory at New Mills, Haddingtonshire, 1681-1703.

W. R. S.

The University
St Andrews
April 1911

CONTENTS OF VOLUME III

PAGE
V

PART II. THE CONSTITUTIONAL AND FINANCIAL HIS-
TORY OF EACH OF THE CHIEF JOINT-STOCK
COMPANIES FROM 1553 TO 1720, WITH RECORDS OF
THE HIGHEST AND LOWEST PRICES OF THEIR
STOCKS OR SHARES, THE AMOUNT OF CAPITAL
AND THE DIVIDENDS PAID (continmd).

DIVISION VI. WATER-SUPPLY COMPANIES.

Section I. The Hampstead Aqueducts (authorized by act of Parliament to
the City in 1546 and transferred to a Company in 1692) . . . . 3

Section II. The London Bridge Water Works (founded 1582): the City
Conduits Company (about 1693). Amalgamated in 1703 as the London
Bridge Water Works Company 11

Section III. The Governor and Company of the New River brought from

Chadwell and Amwell to London (1609) ....... 18

Section IV. Other London Water-supply Undertakings — the Governor
and Company of the Waterwork and Water-houses in Shadwell (1681), the
Borough Waterworks, Southwark (about 1690), Marchmont's Waterworks
(1694), Savory's Waterworks (about 1708) 32

Section V. Water-supply Undertakings in Provincial Towns — at Chester,
P. Mainwaring and others (1634): at Newcastle, William Gray (1646),
" the Folly Waterworks" (1680), W. Soulesby (1694), W. Yarnold (1697) :
at Derby, G. Sorocold (1693): at Liverpool, Water Company (1695),
Cleave Moore (1709) 34

viii Contents

DIVISION VII. POSTAL AND STREET-LIGHTING COMPANIES.

PAGE

Section I. Companies for the Conveyance of Letters and Parcels — the
Undertakers for reducing the Postage of Letters to half the former Rates
(1651-3), the Undertaking of the Penny Post (1680-2) .... 39

Section II. Street-Lighting Companies — the Proprietors of the Convex
Lights or the Partners in the Convex Lights (1684-1744), the Proprietors
of the Light Royal (1687-94), the Proprietors of the Glass Glohe Lights
(1692) 62

DIVISION VIII. MANUFACTURING AND MISCELLANEOUS
COMPANIES IN ENGLAND AND IRELAND.

Section I. The Governor and Company of the VThite Paper Makers in
England (1686) 63

Section II. Other Companies for the Manufacture of Paper — the Irish
Paper Company (1600), the Governor and Company of the Royal Cor-
poration of London for carrying on the Linen and Paper Manufacture
within the Islands of Jersey and Guernsey (1691), the Blue Paper
Company (1691), the Brown Paper Company (1692), Col. John Perry and
Partners (1709) 71

Section III. The Royal Lustring Company of England (1688) ... 73

Section IV. The Governor and Assistants of the King's and Queen's

Corporation for the Linen Manufacture in England (1690) ... 90

Section V. Textile Industries in Ireland — the Governor and Assistants of
the King's and Queen's Corporation for the Linen Manufacture in Ireland
(1691), the Drogheda Linen Company (about 1691), the Calico-Printing
Patent of John Pons and otliers (1693), the Flax and Hemp Company of
Ireland (1696), the Linen Company founded by Louis Crommelin (1699),
the Governor and Company of the Cambric Manufactory at Dundalk , 98

Section VI. Companies engaged in Manufactures dealing with Metals —
the Company interested in the Manufacture and Invention of Milled-Lead
(1670), the Dipping Company (1691-2), the Company formed to work the
Patent of John Stapleton for making Brass for Ordnance (1691), the
Governor and Company for casting and making Guns and Ordnance in
Moulds of Metal (1693), the Venetian Steel Company (about 1692) . . 105

Section VII. Glass-making Companies — the Company of Glass-makers of

Loiidon(1691), the Glass-Bottle Company (1694) 110

Section VIII. Vegetable Oil Companies — the Annuitants and Sharers in
the Beech Oil Company ; the Governor and Company for making and
vending Beech Oil ........... 115

Section IX. Companies engaged in Miscellaneous Manufactures — the
Tapestry-makers of England (1619-1703), the Patentees for Lacquering
after the manner of Japan (1693), the Company for making imitation
Russia Leather (1691), the Company for making ^^ German Balls" to
preserve Leather from damp (1693), the Society for improving native
manufactures so as to keep out the wet (1691) 118

Contents ix

DIVISION IX. COiMPANIES AND PARTNERSHIPS, CHIEFLY
FOR MANUFACTURES, IN SCOTLAND.

PAGE

Section I. The Industrial State of Scotland in relation to the formation of

Companies 123

Section II. The Greenland Fishing and Soap Works Company, or the

Glasgow Soaperie (1667-1785) . . 130

Section III. The Sugar-refining and Rum-distilling Companies at Glasgow
—the Wester Sugar Work (1667), the Easter Sugar Work (1669), the
South Sugar Work (1696), the King Street Sugar Work (1700) . . 133

Section IV. Textile Companies.

A. The Woollen Manufactory at Newmills in the Shire of Haddington

(1681-1713) 138

B. Other Woollen Manufactories— Works at Glasgow (founded by

James Armour, 1688), at Paul's Work, Edinburgh (1683-1708),
at Musselburgh {} 1695), at Aberdeen (1696), at Glasgow (founded
by John Corse, 1700), William Hog's Manufacture (.^1703),
William Black's Manufacture at North-Mills, Aberdeenshire
(1703), Lyell's Manufactory at Gairdin (1704) ... 158

C. The Scots Linen Manufacture (1693) 162

D. The Silk Manufactory (1697) 169

E. Other Textile and Allied Industries — the Manufacture of Colchester

Baizes (1693), the Manufacture of Stockings (1700), the Sail-
Cloth Manufactory at Leith (1694), Rope Work of James and
Thomas Deans (about 1690), the Rope Manufactory at Glasgow
(1690), Cordage Manufactory at Glasgow (1700) ... 173

Section V. The Wool-Card Manufactory at Leith (1663) .... 176

Section VI. The Society of the White Writing and Printing Paper Manu-
factory of Scotland (1694) 181

Section VII. Industries related to Iron, Steel and Mining — Mine-draining
Engine of Marmaduke Hudson and Partners (1693), tlie Company for
working Mines and Minerals in the Kingdom of Scotland (1695), Co-
partnery for the Smelting of Minerals (1701), John Meikle's Foundry
(1686-1705), Glasgow Hardware Manufactures (1699 and 1700) . . 186

Section VIII. Glass and Bottle Works— the Glass Works at the Citadel of
Leith (1664), the Glass Manufacture, North Leith (1699), Works at
Morison's Haven (1696), Glass Manufacture at Wemyss (1698), the Glass
Manufacture at Glasgow (1699) 189

Section IX. Companies formed to carry on Miscellaneous Manufactures —
Gun-Powder Manufacture of James Gordon and Partners (1690), Gun-
Powder and Alum Manufactures by Sir Alex. Hope and Partners (1695),
Leather Works (1695), Leith Combmakers (1695), Leith Saw-Mills (1695),
Porcelain and Earthenware Works at Glasgow (1703) .... 193

Contents

/ DIVISION X. BANKING AND FINANCIAL COMPANIES.

PAGE

Section I. The Governor and Company of the Bank of England (1694) . 199

Section II. The Land Banks — the Bank of Credit on Land Rents (founded
by Hugh Chamberlain, 1695), the Land Bank, established Anno Domini
1695 (founded by John Asgill and Nicholas Barbon, 1695), the National
Land Bank (founded by John Briscoe, 1695), the National Land Bank of
England (1696) 246

Section III. The Bank of Scotland (1695) 253

Section IV. Tlie Bank on Tickets of the Million Adventure or the Million
Bank (1695-1796) 275

Section V. The Governor and Company of the Merchants of Great Britain
trading to the South Seas and for encouraging the Fishing.

A. The Position of the South Sea Company in relation to Public

Finance from 1711 to 1719 288

B. The first group of issues of Capital and Conversions, April to May

1720 308

C. The secret history of the South Sea Scheme ..... 314

D. Loans on Stock, April to June 1720 317

E. The second group of Subscriptions ...... 320

F. The beginning of the Collapse, August to September 1720 . . 324

G. ITie modification of the terms of the second group of Subscriptions

in September 1720 328

H. The Parliamentary Enquiry . 331

I. The final re-adjustment of the South Sea Scheme by Parliament,

1721 346

J. The incidence of the losses remaining to be borne after the re-
adjustment of 1721 . 348

DIVISION XL UNDERTAKINGS FOR EFFECTING INSURANCES.
Section I. The early history of Insurances in England .... 363

Section II. Undei-takings for Insurance against Fire.

A. The Insurance Office at the Back-side of the Royal Exchange, or

the Fire Office, or the Phoenix Fire Office, or Samuel Vincent,
Nicholas Barbon and their partners for insuring houses against
Fire, or Barbon's Office (1667-1703) . . . . . . 375

B. Mutual Societies from 1683 to 1714— the Friendly Society (1683),

the Hand in Hand Society (1696), the Insurance Department of
the Charitable Corporation for relief of the industrious poor
(about 1708-9), the Union or Double Hand in Hand (1714) . 378

Contents xi

PAGE

Tlie Exchange-House Fire Office for Town, the Exchang-e-House
Fire Office for the Country, the Company of London Insurers or
the Sun Fire Office (founded 1706-8) 381

Section III. Undertakings for Insurance relative to Life-contingencies.

A. The Society of Assurance for Widows and Orphans (1699) . 389

B. The Proprietors of the Traders' Exchange-House Office for Lives

(1606-7), the Amicable Society for a perpetual Insurance Office
(1706) 390

C. The various schemes for Insurance on Life-contingencies of the

year 1710 391

D. The Company of London Insurers upon Lives (1709) . . . 394

Section IV. Marine Insurance Companies — the Undertaking for insuring
Ships and Merchandize at Sea (1717), the Undertaking kept at the Royal
Exchange for insuring Ships and Merchandize at Sea or the Mercers' Hall
Marine Company ; the Governors, Assistants and Societies of and for the
Mines Royal, the Mineral and Battery Works and for assuring Ships and
Merchandize (1718), or the Old Insurance, or Onslow's Insurance, in-
corporated (1720) as the Royal Exchange Assurance; Colebrook's
Insurance (1719), Rain's Insurance (1719), Ram and Colebrook's Insurance
(1719), or Chetwynd's Insurance incorporated (1720) as the London
Assurance 396

DIVISION XII. CASES OF COMPANIES THAT USED THE SAME
CHARTER OR GRANT FOR CARRYING ON DIFFERENT AND
SUCCESSIVE UNDERTAKINGS.

Section I. Captain Poyntz and Company for planting the Island of Tobago

(1683) " 415

Section II. The Governor and Company of Undertakers for raising the
Thames water in York Buildings.

A. The Water Supply Company (1665-1719) 418

B. The Land Development Undertaking (1719) .... 422

Section III. The Governor and Company for making Hollow Sword Blades
in the North of England.

A. The Sword Blade Manufacturing Company (1691) ... 435

B. The Land Company (.?1702) 436

C. The Banking Partnership, or Elias Turner Esquire, and Company,

or the Sword Blade Bank Q 1712) 440

xii Contents

PAGE

DIVISION XIII. LIST, ARRANGED CHRONOLOGICALLY, SHOW-
ING THE NEW SCHEMES OR OLD UNDERTAKINGS REVIVED
FROM SEFrEMBER 1719 TO AUGUST 1720 . . . . . 443

DIVISION XIV. STATISTICS OF THE CHIEF JOINT-STOCK COM-
PANIES OF ENGLAND, SCOTLAND AND IRELAND TO 1720 . 469

DIVISION XV. STATEMENTS RELATING TO THE CROWN AND

NATIONAL FINANCES 483

Index .............. 645

Facsimile of Freke's List of Prices of Stocks for Saturday, November 12th,
1715 to Tuesday, November 15th, showing rise in price of stocks on
receipt of news of the Battle of Preston .... between xii — 1

Chart showing maximum daily fluctuations of the Stocks of the South Sea
Company, the East India Company and the Bank of England from May to
September, 1720 ......... m pocket at end

FACSIMILE OF
FREKE'S LIST OF PRICES OF STOCKS

12—15 NOVEMBER 1715

F R E K E'/ P R I G E S of Stocks, ^e

Divides

3lni><« — —
ll&anh ■

Milliou-Bank
Africart . ■

xo
-6

RankcraA iTi^nmentsj
Sourh-Sea Hondt —6,
Jt>itro ^ — yj

Eaft-I nd la Bonus — ^
Bank ClrciiUtion ^j

®atttrti8^

128

tt4 f

3/. 10^.

«7
a 1

Difc.

^onlja^

119
117
90
90

a 50
a 1x9
a I

3/. jf. •)

Difc.

^ttegnap.

12s a

40^.

2 /.I ff,

\Difc.

ClalEs 1711. Fimd 186670/.

/«dr Anmtmy for 32 Years, on
the Pofi'Offite^ leather^ Stamps^
H^ckney-Coaehes^ Chairs^ Cards^
and Dice*

Difcount per Cent.

Firft 1

^ a 9

Second

7 a 10

Third

Fourth

I3f T

Fifth

ClaflJs 171 a. Fund 168003/.
fir Amnim^ for 32 Years, on
leather f f^ellttm^ Parctment^
Starch, Cofee^ Gold and Sirew
Wire^ and Stamfis,

Diicomit per Cent.

5 a 9
10 a 4-

Firft

Second

Third

Fourth

Fifth

T
12 4

HottCV^ x7Xf. Fund 13^000/. per Annunt^ far 31 Years, on Tonnage
and Poundage^ Cnah and Candles.

Courfes. Difc. pet Cent

loi t9 lyo fram 4 *o 6

Courfes. Difc. per Cent.

16 to too from a f# 4

Ho^tcrt 17x1. Fund x6f5oo3/. per /Jnnum, for 32 Years, in three
Lotteries, on Soap ^ chequer'd and ftrip*d Li nnen^ Paper j and Stamps.

Courfes. Difc per Cent. I Courfes. Difc per Cent.

y to ^o from 4^61 8x ro 100 from 7/. to 8/.
31 to So fr<,m 6 t9 "J \ xoi to t%o from 8 ta 9

IrOteerB »7»3' f"»<l Jfooof. per ^»7!i»«, for 31 Years, Ciyil Lift,
^ to 1 from to I. fo 13/. I ax to 30 /r«m a6/. ro 28/.
10 from 13 f* 20 I 31 fo Ao'from 28 w 29

5 to
It to

10 from Z.O to 26

iUttcrFi7X4« Ftmd 116573 J. fet Amunu for 34 Years, oaSoap^ Pa-
per^ chequered and firip'd Unnen^ Starth^ Coals exported^ and Stamps.

Blanks ^t^per Cent. Prizes at 4 per Cent.

from 2 1, to 12 I,

from 12 f« 14

fr4m 14 to x6

from 16 to iS

from 18 r» 20

Ccairfes,

x to 10

1 1 to 20

21 f» ro

IGX

to
to

XOO

T40

from

from
from

from
frAm

24
28

to
to
tfl
to

16 L

24
28

3!0|n jTCCl^C, ^^okcr^ at his Office in (!5pcbange--3Uci», buys and
qjf^J^ Any Gentleman may have tkis P*jpei left at lus Hoiife

Facsimile of Freke's List of Prices of Stocks for Saturday, November 12th,

receipt of news of

from jrtOiap to Zm^Up Nov. i 5. 1 7 1 5. N® 67

Amfterdani
Socterdam-
Antwerpe -
Hamburg m
Pans — -*
Bourdeaux -
Madrid •—
Cadix — —

Courfc of crcljange*

36 1<

47 -

Leghorne
Bilboa —
Genoua —
Venice —
Lifboii —
Porco
Dublin

Int.
6

5
4
6

S
f
6
6
6
6
6
$
6
4
6
4
S

CjCCfiequet^ Advanc'd

I f th 4 Shilling Aid — 1880000

jda Shilling Aid —

4ch % Shilling Aid —

yth a. Shilling Aid —

Hops « ■

Malt 1715 — ■

Malt 17x4

Low Wines 170J
Candles, c^c. —
Subiidies 1709 —
Tin

Chf.i7ixBlank8&Pr.
Clafljsi7xa

Lottery 1711 — —
t)itto 1713, Civil Lift.
Ditto 17x2, in 3 Lotf.
Ditto 171 4, Benefits —
Ditto X714, Blanks —

940000

t 80000

700000

6 f 0000

700000

y 00000

645:000

1x1 4840

2602200

2541990

1928^00

633000

2541740

719040

1 1 y756o

PaidofF

1832420

92663^

84x007

22500

93^97
paid off.

328s:<!f4
638292
185^780
463^49

10733*9
763^0
30047
X79620
23570
83120

Pay.| 3^70

SO
45

45- I

5^ 3
T 2

11604
X095r

894
1722

2S37
^^37

2^1

xo Payment 12
2 Payment S3

20
8

Jtli
N.

1 Lot.

2 ditto

3 ditto

^ii^ZS^ 17x0, dite Sefttmbtf 29, x<7i4, are.^id ^11 off.
1B&Unll0 1710, of X4 J. frr Annnm^ for 28 Years, 8 /.

25.

9nnuttfes;«

Years Purchafe.

x^93, 14/. fet Cent, Excife ■ — '

X70f, 3700/. ^^r Week Excife ■■ ' ■ — —

X7065 J AdditioHal Cuftoms and Excife — •

1707, Low Wines, Sweets, Pedlars, and Coftoms —

1708, 80000/. I Moiety of old Tonnage and Pound.
1708, 40000/. Surpluftes — — . -^— __™
9/. perC. for 27 Years } Excife, Raifins, Spices, SnufF 11
1^?15W X710, for 28 Years i, Coals and Windows ix

M4- i f

«y a T

ly
xy

Eaft-India Sale amounts already to 539400 1.

The Prices of the Stocks in this Paper are computed from the Morn
»"g, to Three a-Clock each Day.

^lls Stocks, and all piiblick Securities, and Ituds Money on the fame.
Twice » Week, for l^alf A Cw»n aQuartfr.

1715 to Tuesday, November 15tli, showing rise in price of stocks on
the Battle of Preston.

PART II. (continued)

DIVISION VI.

WATER-SUPPLY COMPANIES

S. C. HI.

SECTION I. THE HAMPSTEAD AQUEDUCTS.

(Parliamentary powers [granted to the City] in 1546 —
transferred to a company of above title in 1692

AND LEASED TO NeW EiVER COMPANY IN 1859.)

Although there are many gaps in the history of the water-supply
of London, there remain sufficient materials to 'indicate the general
development of the building up of the system that exists at the present
day. At the time of the Norman conquest and for about a century
afterwards drinking water was obtained from the Thames and from its
tributary streams. The latter have now disappeared, but Stow mentions
four brooks, one called the river Wells, the Wallbrook, another brook
and the Oldborne. By 1235, these streams had been injured by the
encroachments of buildings and were in some places partially filled up
with rubbish, and in that year the brooks, within the City, were confined
by bricked banks, while reservoirs were constructed, from which the water
passed by pipes to fountains. These were known as conduits or wells.
In 1236 the city authorities found it necessary to lay a 6 in. pipe to
bring water from Tyburn. By 1342, though the conduits were useful
in their respective areas, the water question had become acute through
impediments placed in the way of persons desirous of carrying water from
the Thames. Access to the river was gained by means of narrow lanes,
and the adjoining householders exacted a toll from those passing
through, which became a great grievance. An inquisition was held with
a view to restoring the ancient rights of way. The resulting increase,
in facilities for drawing water from the Thames, made the supply fairly
adequate during the next century, but by 1439 it again became necessary
to bring water from comparatively outlying districts by pipes. In that
year a deed was signed by the Abbot of Westminster, granting the
use of springs near Paddington. New conduits were made in several
places from 1500 to 1528, and in 1535 a grant was executed by the
Common Council to provide for the laying of pipes to convey water
from Hackney ^

1 Stow, Survey of London, passim', HydrauliUf by W, Matthews, pp. 4-10.

1—2

4 The Hampstead Aqueducts to 1690 [div. vi. § 1

It ilnfortunately happened that the new conduits availed only to
maintain the previous volume of water, owing to the drying up of
some o^ the springs that had been long in use. Consequently, in spite
of the Expenditure incurred, the supply was inadequate for an increasing
population, and it became necessary to obtain water from a distance.
Springs had been discovered at Hampstead, and the City decided, about
1544, to seek parliamentary powers for the acquiring of land and laying
of pipes. The act was passed in 1546 ^ and it is of considerable interest,
not only as the first private act giving compulsory powers, but also as
constituting the foundation of an undertaking which was afterwards
transferred to a company still in existence.

The act 35 Henry VIII. c. 10 states, in the preamble, that sweet
and wholesome running water from fresh springs was commodious and
profitable for the inhabitants of cities. The City of London had
formerly been abundantly supplied, but a recent drought or other
cause had diminished the supply of water from the springs that had
been used previously. The Mayor, William Bower, was therefore
authorized to convey to the City water from springs at Hampstead,
Marylebone, Hackney, Muswell Hill or other places within five miles
of the City. The Common Council, as undertakers of the work, was
permitted to enter any grounds, where springs were to be found, and
to convey the water by pipes, subject to the payment of compensation
to be determined by a committee appointed by the Lord Chancellor.
This privilege was subject to the limitation that water, necessary for
the use of houses or villages, should not be diverted, nor might the
servants of the corporation dig in the King's grounds without leave.
Payment of 1 lb. of pepper annually was to be made to the Bishop of
Westminster, as Lord of Hampstead Heath. The penalty for resisting
the servants of the corporation, engaged in the execution of this act,
was 40,9.2

It appears that, although the act was passed in 1546, it was not
until 1590 that the works were completed. There were originally four
reservoirs at Hampstead from which the supply for the north-west
district was drawn ^ For over a hundred years, the history of this
conduit is obscure. During that period the completion of the New
River'' and the various pumping-engines for raising Thames water solved
for the time the difficulty of the supply, and it is probable that the
Hampstead conduit shared the fate of other similar works after the
Great Fire and, while still in existence, was neglected.

It has been shown elsewhere how many undertakings had been

1 35 Henry VIII. c. x. 2 statutes, in. p. 967.

3 Matthews, Hydraulia, p. 13. ^ Vide infra j Division vi., Section 3.

Div. Yi. § 1] The Formation of a Company 1692 5

started from 1691 to 1695\ At that time the New River company
had at length justified the high hopes of its founder, and the shares
commanded a considerable premium. In view of this fact, the im-
provement of the London water-supply was one of the schemes for
which capital was readily procurable, and amongst the companies, then
formed, was one intended to improve the Hampstead conduit. This
company was promoted by William Paterson, the founder of the Bank
of England, and the original shareholders included John Holland, the
founder of the Bank of Scotland, Francis Tyssen, a prominent East
India merchant, Dalby Thomas, Chief-Justice Chester and Sir John
Trenchard. Paterson had induced the Mayor and Council to grant
him and his assigns a lease for 31 years of all the rights of bringing
water from the parishes of St Pancras, Hampstead and Hornsey, which
were not, at January 10th, 1692, otherwise used by the Mayor or
Commonalty or by persons claiming under them. The rent, payable
by Paterson, was £S0 a year, and in addition he had already paid a
fine of £9^00. To provide working capital, a company was formed
(which is now known as the Hampstead Aqueducts) with a capital,
divided into 600 shares of a nominal value of £9.0 each. Thus, when
the shares were fully paid, the total capital would be <^12,000. By
an agreement, signed on January 26th, 1692 by the members of the
company, it was stipulated that 100 shares, of the nominal amount
of c£^2,000, should be credited to Paterson and two others, who
had co-operated with him in obtaining the grant and paying the
£900 to the City, besides discovering certain new springs. These
100 shares were known as "maiden shares.'"* They were divided as to
35 to Paterson, 35 to Samuel Tucker and 30 to Israel Hayes. The
three promoters reserved the right of receiving 100 of the remaining
500 shares, subject to the payment of £90 as called up. This ac-
counted for 200 shares. 200 shares were divided amongst nine persons,
of whom six held 30 shares each. There were still 200 shares to be
issued. It was agreed that £9 per share on the 500 shares should be
paid before the last Tuesday in March 1692 and the remainder as
ordered by the committee of managers. No member was to transfer
any share after the first Tuesday in May, without having paid it up in
full. Shares, on which any call remained unpaid for 60 days, were
subject to forfeiture. This agreement is unique in prescribing the
liability of the members, which was to extend not only to the amount
uncalled on each share, or that called but not paid, but also to "the
payment of the rent of the lease or grant [from the City] and in all
other costs, charges, damages or expenses, which shall or may arise from

^ Vide supra f Part i., Chapter xvii.

6 The Hampstead Aqueducts [div. vi. § 1

or by reason of the said undertaking.'' Members were entitled to one
vote for each share. The qualification for a "committee"" was 10 shares.
The ^'committee of management" consisted of a maximum of 15 and
a minimum of 9; the majority being a quorum. It was further agreed
that the £9.00^ paid by the three promoters, should be reckoned as a
payment on the 100 '' chargeable " shares allotted to them. The com-
mittee was given powers to negotiate with the City for the acquisition
of additional springs ^

When the pamphlet, entitled Anglice Tutamen^ was written in 1694-5
there had been dealings in the shares of this company, and hence, in
that work, it is characterized as one which had suffered the evils of
stock-jobbing to prevail against it. Therefore, the writer predicted
that the undertaking would come to grief. Anderson, in referring to
this prophecy, is in error in saying that the company proved a failure,
since, at the time he wrote, it was distributing modest but regular
dividends^. As the shares, unissued in 1692, were placed and the calls
were paid up, the pipes were extended and consumers supplied in the
suburban district (as it was then) between Tottenham Court Road and
Hampstead. Amongst the records of the company there is an old
collector's book, dated 1762, in which rents were received from houses
in the following localities. St Ann's Court, Broad St., Denmark St.,
Dudley Court, St Giles, Kentish Town, King St., Queen St., Russell St.,
Soho Sq., Tottenham Court Road, Tyburn Rd., Wardour St., Wind-
mill St.

In 1700 the company became involved in a law-suit with a number
of the residents at Hampstead, who complained that the operations of
the undertaking had deprived them of water-rights they had previously
possessed. It soon became apparent that, owing to the period which
had elapsed since the original act had been granted and the interval
during which the rights of the City had been in abeyance, the whole
question was very obscure ; and the complainants, in endeavouring to
define their grievances, began to dispute amongst themselves. The
result was a long and involved Chancery suit, and the original complaint

1 MS. Articles made, concluded, and agreed this 26th January in the fourth year
of our Sovereign Lord and Lady William and Mary... between Samuel Tucker and
William Paterson of London, Merchants, and Israel Hayes of London, Gentleman,
as well for themselves as all others who shall by or under them or any of them be
admitted partners in the grant, undertaking and things hereinafter declared: in
Transfer Book A of the Hampstead Aqueducts. (I am much indebted to Mr
George Hakewill, of the Hampstead Aqueducts Office, 8, Staple Inn, London, W.C.
for his kindness in placing all the documents relating to this company at my disposal.
It is on these papers that the following account of this very interesting company is
based.)

2 Anglice Tutamen, p. 27; Anderson, Annak of Commerce (ed. 1790), in. p. 159.

Div. vi. § 1] Dividends paid 1762 to 1830 7

against the company was not passed ». While this litigation was im-
pending and while the success of the undertaking was still distant, the
price of the shares appears to have been low. William Paterson had
become liable for a large sum of money to the Darien company, and
his shares in this and other companies had to be sold^. The holding
in the Hampstead Waterworks disposed of was one of twenty shares
for which, in the books of the Darien company, a payment by the
broker of £9.50 sterling is acknowledged. A subsequent remittance
of ^50 by the same person probably relates to this transaction, so that
it may be assumed that the shares were sold at <^15 eachl Although
this price was 25 per cent, below par, it was higher than that realized
during the period of depression experienced by water companies from
1812 to 1815.

From 1700 to 1761 there is scarcely any information as to the fortunes
of the company. About 1726 its office was totally destroyed by fire,
and none of the papers were saved. The earlier part of the eighteenth
century was a time of keen competition amongst London water com-
panies, and the district of each was subject to invasion by its rivals, so
that it was far from easy for the recently established companies to
make profits. By 1762 the Hampstead company paid "an eighth"
dividend of 5;y.; but; whether this was the eighth from the foundation
of the company or from the burning of the papers, does not appear.
From 1762 down to the present day, dividends have been paid regularly
each year.

For the eleven years from 1762 to 1772 a distribution of 5s. per
share was made annually. This was only 1^ per cent, on the original
nominal amount of the share. As the company was capitalized (by a
method to be explained below) the payment per cent, was less. For
the next nine years, from 1773 to 1781, the annual dividend was 10^.
per share, or an average of 7*. Qd. during 20 years from 1762. Then
for the two years 1782 and 1783 there was a relapse to 5s. per share.
From 1784 to 1798, 7*. Qd. was paid and from 1799 to 1801 the distri-
bution was again 10^. From 1802 to 1829 the dividend rose, and by
1830 for the first time 9,0s. per share was paid, or a return of 5 per
cent, on the nominal amount of the share. But, during the 138 years
the company had been in existence, large sums had been set aside to
form a reserve fund and for expenditure on capital account. According
to a balance-sheet of the year 1834 there was an investment of d^l 1,000
in 3 per cents, at 91, and it appears to have been the custom of the
directors to charge 10 per cent, annually of all new works to revenue.

1 Park, History of Hampstead, p. 74. ^ Vide supra, ii. p. 219.

3 The Life and Writings of William Paterson, by S. Bannister, London, 1858, ii.
p. 269.

The Hampstead Aqueducts [div. vi. §

The following is a copy of this document, which is of considerable
interest, as showing the basis on which the capital account of the
company was compiled:

Balance-Sheet of the Havipstead Aqueducts for 1834.
(From the Minute Book beginning May 4th, 1882.)

£ s. d.

£ s.

34. March 81.

By works producing rental (de-

ducting empty houses)

2,897 0

Deduct ordinary expenses ... 1,394 0 0

„ extraordinary expenses 202 13 0

„ 10 7o on expenditure of

£2,285. 12s. on new works 228 10 6

1,825 3

1,071 16

£ s. d.

£ s.

534. March 31.

1834. March 31.

To dividends unpaid... 76 0 0

By £1,071. 16s. M. at

To adjustment

of fine

10 years' purchase...

10,718 5

to the City of London 792 5 6

By stock on hands (es-

To balance divided into

timated)

150 0

600 shares, g"! ving per

By £11,000 3% stock

share, £34. 11*. 4^d. 20,741 10 3

at 91

10,100 0

By cash

641 10

£21,609 15 9

£21,609 15

Probably a few years earlier the amount invested in government
stocks was larger, for in 1833 a well had been sunk on Hampstead Heath
and an engine erected to raise the water for supplying the town of
Hampstead, where, hitherto, the inhabitants had been dependent on
a water cart, the driver of which charged them ^d. per bucket-full.
This well provided 200,000 gallons per day and the water was stored
in eight reservoirs between Hampstead and Highgate\

The great obstacle hitherto to the success of the company had been
the scantiness of the supply it could provide, and, with the addition of
this new source, its business developed rapidly. The dividend of 20,9.
per share was continued till 1837. By 1841 it had risen to 30*. and
by 1844 to 40*. Thus it was only after the company had been in
existence for more than a century and a half that a dividend was paid,
which might be considered reasonable, taking into account the capital
provided from revenue. In fact at this period it is probable that, if
the shares had been valued relatively to the total existing assets, the
return would not have been much more than 5 per cent. From 1844
to 1851 the dividend continued to improve, reaching a distribution of

Matthews, Hydraulia, pp. 13, 14.

Div. vi. § 1] Leased hy New River Co. 1859 9

50^. per share in the latter year. The improvement in the condition
of the company is shown more by the price of the shares than by the
dividends. From 1812 to 1815 transfers had been made at £\^ per
share or very greatly below par. In 1732 sales were recorded at ^17
and £9.0 and at ^25 in 1733, falling to £9.0 in 1835. By 1848 the
average of these prices had been doubled, a transfer having been made
in that year at 40. Ten years later {i.e. in 1858) the price had again
more than doubled rising to 90, and from 1859 transactions have taken
place at 100 or over. The advance in the price of the shares in 1858
and 1859 was due to the transfer of the undertaking to the New River
company. The Hampstead Aqueducts formed a wedge, driven into
the New River district. The supply, that was available for the former,
was limited, and thus the directors could not expect a great expansion
in business. Therefore, increased profit might only be anticipated in
the unlikely event of a great rise in rates. It follows that it was to
the advantage of both companies to effect a working agreement, which
took the form of the New River company leasing for ever the works of
the Hampstead Aqueducts, subject to a payment of a yearly rent of
d^3,500, which admits of a dividend annually of £5. \0s. free of tax
on each Hampstead Aqueducts share. The latter company continues
to exist, in its corporate capacity, for the division of the rent amongst
its members, which was supplemented from time to time by occasional
bonuses from a surplus fund, which is now (1908) devoted to the pay-
ment of the largely increased Income tax^

Summary of the Capital and Dividends of the Hampstead Aqmdiccts.

Original Capital 600 Shares of £90 each = ^12,000.

Prices of Shares and Dividends.

Year

Price of shares

Dividend per share

1700

152

1692—1761

—

At least seven dividends
were paid before 1762

1762—1772

—

5/-

1773—1781

—

10/.

1782—1783

—

6/-

1784—1798

—

7/6

1799—1801

—

10/.

1802—1810

—

12/-

1 £3,500 a year, divided among 600 shares would give £5. 16*. 8c?. per share,
but Qs. Sd. a share is now (i.e. in 1909) required for the payment of Income tax
{ = 5s. Qd. a share) and the expenses of rent, management, etc. ( = ls. 2d. a share).
Mr Hakewill has supplied me with this statement of the present position of the

company.

2 Bannister, Life of William Paterson, n. p. 269.

The Hampstead Aqueducts [div. vi. § 1

Year

Price of shares

Dividend per share

1811—1817

14/-

1818—1829

—

16/-

1830—1837

17—25

20/-

1838—1840

—

25/-

1841

—

30/-

1842—1843

—

36/-

1844-1846

—

40/-

1847—1850

45/-

1851—1858

50/-

1859—1862

1001—1052

55/- (half-yearly) guaranteed
by New River company
with occasional additions

1 In 1859 and 1862.

2 In 1859. A transfer was made in 1871 at 103, in 1890 at 135, in 1896 at 207.

SECTION II. THE LONDON BEIDGE WATER
WORKS (founded 1582). THE CITY CONDUITS
COMPANY (founded about 1693). Amalgamated
IN 1703 AS THE LONDON BRIDGE WATER
WORKS COMPANY (1703-1822).

Besides the various conduits bringing water to the city, there were
several inventions, in the latter part of the sixteenth and all through
the seventeenth century, to force Thames water to a sufficient height
to enable it to flow by pipes to the houses in the vicinity. One of the
earliest and the most remarkable of these was a force-pump, invented
by Peter Morice and established on London Bridge in 1582. Morice
took advantage of a peculiarity in the construction of the bridge, as
it existed in his day. Through the small size of the arches and the
thickness of the piers, at certain states of the tide, there was a con-
siderable fall of water. Morice's idea was to utilize this to drive a
wheel which worked a force-pump'. He was able to demonstrate the
feasibility of this invention, by forcing water over an adjoining church
spire, and he made an agreement with the Council under which he
obtained the use of the first and second arches on the north side of
the river for 500 years from November 24th, 1582, at an annual rent
of 10^.2 Morice was compelled to establish his entei-prize at his own
cost, since it was noted in 1593 that "no great man or magistrate"
would open his purse to help him, the invention not being considered
" sensible ^"

In the year 1633 the London Bridge Water Works supplied the
southern portion of the City as far as Gracechurch St. Morice and
his successors had the advantage, over other proprietors of engines, that

1 Tlie wheel, as it existed at a later period, is illustrated in Hydraulia, p. 28.
There are several old engravings of London Bridge and Morice's wheels inserted in
a MS., preserved in the Guildhall Library, " A Short Account of the London Bridge
Water Works and Memorandums relating to their Business."

2 Chronicles of London Bridge, by an Antiquary [Richard Thomson], London,
1827, p. 556.

2 A Brief e Apologie of Gertaine New Inventions whereof there hath bene a publicke
View taken in London [1593]. Coll. Broadsides Soc. Antiq., No. 91.

12 London Bridge Water Works 1582-1703 [div. vi.

they did not need to provide horses for working their pumps, but the
area to which water could be supplied was somewhat restricted by the —
rise of the ground, which precluded the water from being pumped so^
as to find its way to houses in the higher districts. Therefore, as far as
can be discovered, the Morice family had a steady business but one
which had natural limits to its growth beyond a certain point, and,
during the first half of the seventeenth century, the concern was fairly
profitable. In the Great Fire the pumping-station was burned down,
and the third generation of the family, engaged in the water-supply
undertaking, found some difficulty in obtaining capital to erect new
works. They eventually succeeded in borrowing =£2,000 on the security
of the income to be derived in future from the business, but they
complained that, while the rebuilding was in progress, the New River
company had laid pipes into the part of South London they had been
accustomed to supply. Accordingly in 1667 they presented a petition,
asking that the New River company might be restrained from doing
so^ From the re-erection of the pumping station until the Revolution,
the proprietors continued to succeed, as is shown by the numerous
imitations of their system during the latter part of the reign of
Charles II. The somewhat reckless promotion of water companies
from 1692 to 1695 no doubt caused serious competition, and thus, when
an offer was made for the sale of the works in 1703, the Morices were
prepared to accept it.

This offer was made by one of the recently established rival com-
panies, which had been formed about 1694 by a banker, named Richard
Soames. Like the Hampstead Aqueducts, other conduits had fallen
into a condition of bad repair. When the City Council had become
discredited over the mismanagement of the Orphans'' Fund 2, an act for
the relief of the orphans was passed, which provided that, besides
charging the city lands with <£8,000 a year, the rent accruing from
any future aqueduct should be allocated towards making good the
deficiency^. Under the spur of this legislation, the Council seems to
have been disposed to receive offers for the construction of new conduits,
or the handing over of disused ones to persons who would form a
company and undertake to pay a certain rent. Soames obtained a
lease of the conduits from Paddington, Marylebone, Islington, Hoxton,
Hackney and Dalston, and he established a city office at the Black
Horse against Poultry Compter. He, with a number of others, who

1 State Papers^ Domestic, Charles II. _, ccxxix. 162; Calendar, 1667-8, p- 132.

^ A Collection of the Debates and Proceedings in Parliament in 1694 and 1695 upon
the Inquiry into the late Briberies and Corrupt Practices, London, 1695, pp. 11-18,
92-6.

3 Statutes, VI. p. 464,

Div. VI. § 2] The City Conduits Company 1693-5 13

contributed the capital necessary for the extension of mains and the
laying of service pipes, formed a company known as the City Comhdts.
There are no details available as to the organization of this company,
but in all probability its constitution resembled that of the Hampstead
Aqueducts. In July 1694 the service pipes were being laid into houses,
and Houghton records his impression that the new company would " make
us abound with, not only useful, but more pleasant waters than ever^"
In the following September the company advertized that "the water
would wash very well, and is as fine as any other whatever and much
finer than most^." It was announced, too, that in the case of any four
persons, who lived within a distance of not more than 100 yards from
an existing pipe, agreeing to take this water, service pipes would be
laid into their houses. A few months later another advertisement
appeared, which described the merits of the water in more glowing
terms as " those fine conduit waters, which have been greatly esteemed
and desired by all and by long experience approved the best for washing
and for all other uses and have served the whole City for many hundreds
of years, being now settled by act of Parliament for the benefit of the
orphans^" A subsequent notice to intending consumers mentions the
chief districts into which mains had been laid. There were six pipes,
one starting from each of the following collecting places — Paddington,
Marylebone, Islington, Hoxton, Hackney and Dalston. These were
continued to Aldermanbury, Bond St., Broad St., Bun-hill Fields,
Charing Cross, Charles St., Cheapside, Coleman St., Cornhill, Duke St.,
Fleet St., Fore St., Germain St., Green St., Grub St., King St.,
Leicester Sqr., Lothbury, Lombard St., Ludgate Hill, Ludgate St.,
Moorfields, Old Bailey, Pall Mall, Panton St., Piccadilly, Poultry,
Spitalfields, St Albans St., St Bartholomew's Lane, St James' Market,
St James' Sqr., St James' St., St Paul's Church Yard, Strand, Thread-
needle St., Whitechapel, Wormwood St. It was added that more pipes
were being laid daily and would be continued into other streets at the
request of consumers ^ This list is not only of interest from its full
record of places supplied, but also as showing the widespread com-
petition fostered by free enterprize. Several of the places named were
also supplied by the Hampstead Aqueducts, others again were within
the districts of the New River, the Thames and the York Buildings °
companies. In the struggle to attract consumers, the City Conduits
offered more favourable terms than had been given by the New River

1 Collections, No. 103 (July 20, 1694). ^ /^^.^ No. 112 (Sept. 21, 1694).

3 Ibid., No. 126 (Dec. 28, 1694). * Ibid., No. 133 (Feb. 15, 1695).

5 Owing to the York Buildings company having carried on other enterprizes
besides that of water-supply, the account of it is placed with that of similar under-
takings in Division xii.

14 The City Conduits Company 1695-1703 [div. vi. § 2

company. Both undertakings did not guarantee to supply water
a greater pressure than would enable the basements of houses to bei
connected. The New River had been in the habit of requiring a
deposit from new consumers (called a fine), as well as the signature of
an agreement to take the supply for a number of years. This document
was called a lease, and a fixed rent was charged irrespective of the
quantity consumed \ At the end of the seventeenth century both the
New River and City Conduits charged about 24^. a year rent, but the
latter exempted its consumers from the payment of a fine or the signing
of a lease 2. It is on record that this concession by the City Conduits
had produced " a great fall in the actions of the New River company "
by 1695 3, and probably the older enterprize retaliated. In 1697 the
City Conduits made an attack on the New River company by the
publication of the following advertisement — " in winter or rainy weather
'tis good for all folks to watch their waters to try whether the City
Conduits waters be not very clear and most fit for drinking and all
other uses^"" Although the New River is not mentioned by name, the
innuendo (that the water supplied from it was muddy) is confirmed by
other contemporary evidence — for instance Strype asserts that the
London Bridge company's water " became clear sooner than New River
water and was ever a clearer waters"

During the next five years the City Conduits continued to attract
consumers to the detriment of the New River company and the pro-
prietors of the London Bridge works. The latter decided in 1703 to
sell their undertaking to Soames for <£^38,000^. This agreement was
signed on June 29th, 1703', but Soames had previously negotiated
through Morice for a lease of the fourth arch of London Bridge for
m\\ years from August 24th, 1701, at 10^. a year rent and d^SOO fine«.
This lease, like that made in 1582, was due to terminate in the year
2082. Soames thus obtained possession of the fu'st, second and fourth
arches of London Bridge on the northern side. The third arch had
been leased by the City at an early period as a wharf and could not be
acquired at this date. . An agreement was also made with Sir Benjamin
Ayloff, under which ^^300 a year was paid for the use of the adjoining

1 An original early New River "lease" is preserved at the Guildhall Library,
MSS. No. 191. In this case the " rent" was 51*. per annum for a ^-inch pipe.

2 A New View of London, by E. Hatton^ 1708, p. 785.

3 Anglice Tutamen, p. 27.

* Houghton, Collections, No. 234 (Jan. 24, 1697).

• 6 Stow, Chronicle (ed. Strype, 1754), i. p. 27. ^ Ibid., p. 28.

7 Copy Deed of Covenant from New River company to the Proprietors of the
London Bridge Water Works in vol. iv. of "MS. Papers Relating to Water
Companies," Guildhall Library, London.

* Chronicles of London Bridge, ut supra, p. 556.

•I

be^

Div. VI. § 2] London Bridge Water Works Go, 1703 15

site on the river bank, known as Broken Wharf. On this two engines
were working in 1708\ Thus in 1703 Soames and his partners had the
City Conduits and the London Bridge Water Works under their control,
and they were spending capital freely in developing these various under-
takings. In addition, a further supply from Marylebone, originally
established by the City, was acquired. This conduit had been let, on
the passing of the Orphans' act, at an annual rent of J'TOO, one year
of which was payable in advance with a fine of .5^5,650. This price
was found burdensome, and the lessees were discharged from the bargain.
Soames, thereupon, acquired this undertaking also at the same rent, but
without the fine 2.

The capitalization of this extensive system was accomplished by the
formation of a new company known as the London Bridge Water Works
Company, the management of which was in the hands of a governor and'
nine assistants. The capital in 1703 was i?l 50,000, divided into 300
shares of £500 each. Subsequently, each share was divided into five,
so that, instead of 300 shares of ■£*500 each, the number became 1,500
shares of ^100 each, and this division was continued during the remainder
of the company's history ^

The energetic management, that had marked the amalgamation of
the dififerent systems, now united as the London Bridge undertaking,
was continued. The mains were extended and the Bridge works were
enlarged. In 1708 there were thirteen engines at work, and at that
date Goodman's Fields, the Minories, Houndsditch, Whitechapel and
Birchin Lane were supplied from the Thames ^ In 1718, and again in
1743, efforts were made to secure the third arch of the bridge but this
was not acquired until 1761, and the lease in this case also was renewed
so as to terminate in 2082 ^ In 1765 negotiations were entered into
for the fifth arch, which were continued for a number of years.

For a considerable period after the formation of the London Bridge
company, it appears to have been very successful and to have been a
dangerous rival to the New River. Dividends were announced in the
advertisements of meetings in the London Gazette for 1710^ and about
1778 a reserve fund of .£15,000 nominal in government stocks had been
formed''. This was only 10 per cent, on the capital and was smaller
in proportion than the reserve and depreciation funds of the New River
and Hampstead Aqueducts.

1 Hatton, A New View of London, p. 791.

2 Stow, Chronicle (ed. Strype, 1754), i. p. 29.

3 Deed of Covenant between the New River company and the Proprietors of the
London Bridge Water Works, ut supra.

* Hatton, A New View of London, p. 791.

6 Chronicles of London Bridge, p. 656. ^ E.g. Nos. 3962, 4729.

7 MS, Short account of London Bridge Water Works [Guildhall Library], f. 21.

16 London Bridge Water Works Company [div. vi. § 2

Towards the end of the eighteenth century the company had to facJI
the loss of supply from the various conduits, since the collecting areas
had become converted into building ground by the extension of the
suburbs. As time went on, the Thames became a less and less desirable
source of supply ; and, when the height of buildings in the city increased
and water was required on the higher storeys, the machinery at London
Bridge was no longer able to generate the power required. For these
reasons, by 1790, the dividend was 3 per cent, and the price of the
shares 70. From 1794 to 1797 the dividend fell to 2 per cent., rising
to 3 per cent, from 1798 to 1811 ^ After 1810 the demands on the
company for very large capital outlay, if it was to hold its own, proved
to be beyond what the shareholders could provide. Not only was more
powerful machinery required to increase the pressure, but the action of
the New River company in laying down iron pipes, in place of the
wooden ones previously in use^, forced other companies either to follow
its example or work at a disadvantage. The company was either unable
or unwilling to adopt any improvements, beyond introducing an iron
wheel to replace one of the wooden ones of the old type; and, once
the rebuilding of London Bridge was decided upon, it was seen that
the company would find it difficult to carry on its business. Had it
decided to stand on its rights, the erection of the new bridge might
have been considerably delayed, since the company's lease could not
have been terminated, without compensation, until 2082. On the
whole, the company was well-advised in the decision it came to, namely
to retire from business, provided it could obtain a fair price for its
property and rights. The New River company was at this date in a
strong financial position and, after some negotiation, it offered, in
consideration of the transfer of the greater part of the mains of the
London Bridge company, to guarantee the same dividend that had been
paid from 1818 to 1820, namely 2 J per cent., during the remaining
260 years the leases had to run from 1822^

Once this covenant had been signed and the property of the company
disposed of, there was no reason for its continued existence and it was
accordingly dissolved by an act of Parliament 3 George IV.

^ Beportsfrom Parliamentary Committees Session 1821^ v. p. 201,

2 Vide infra, p. 26.

3 Deed of Covenant between the New River company and the Proprietors of the
London Bridge Water Works, ut supra.

Div. VI. § 2] Capital 1693, Dividends from 1790 17

Summary of the Capital^ Dividends and Prices of Stock,
London Bridge Water Works Company.

Capital .£^150,000 in 1,500 Shares of .^100 each.

Prices and Dividends.

Year

Price of shares

Dividend per cent

17901—1793

1794—1797

—

1798—1811

—

1812

—

1813—1815

—

1816—1817

—

1818—1820

From 1822

—

2^2

1 Prior to 1790 numerous dividends were paid.

2 Guaranteed by New River company until the year 2082.

s. c. III.

SECTION III. THE GOVEENOR AND COMPANY OF
THE NEW RIVER BROUGHT FROM CHAD-
WELL AND AMWELL TO LONDON (1609).

The foregoing accounts of the Hanipstead Aqueducts and London
Bridge undertakings show the progress of two typical methods of
supplying London with water; the former representing the system
of conveying spring water in pipes from higher ground and the latter
that of pumping it from the Thames. The utility of each was limited,
in the one case by the smallness of the supply and in the other by the
limited powers of the force-pumps, available in the time of Elizabeth
and the Stuarts. When it is considered that in 1590 the population
of London was 160,000, it will be seen that, even then, it had become
necessary to augment the supply by bringing it from a distance \ As
early as 1577 a plan had been proposed for drawing water from the Lea
and making a conduit to bear it to London I Towards the end of the
reign of Elizabeth the Corporation obtained parliamentary powers,
similar to those contained in the act authorizing the Hampstead
Aqueducts, enabling it to convey water to the City from any pai-t of
Middlesex or Hertfordshire ^ No record remains of any effort being
made to formulate a definite scheme, and it was not till early in the
reign of James I. that a possible source of supply was selected and
consideration given to the engineering problems involved. In 1605
an act was passed, empowering the Corporation to acquire land, suffi-
cient to excavate a trench for bringing a fresh stream of running water
from the springs of Chad well and Am well in Hertfordshire. This
measure provided machinery for the settlement of the price to be paid
landlords for the ground to be acquired, and it bound the undertakers
to provide bridges for the public to cross the canal, where such were
necessary*. A survey was made soon afterwards; and, in deference to
the views of the proprietors through whose lands the cutting was to

»
^ Anderson, Annals of Commerce, ii. p. 235.

2 Calendar Treasury Papers, 1547-80, p. 569.

3 Mattliewsj Hydraulia, ut supra, p. 43.
* 3 James I., c. 18.

Div. VI. § 3] The New River Scheme 1570-1610 19

be made, it was enacted in 1606 that the stream should be enclosed
in "a vault" of stone or bricks This proviso would have increased
the cost of the work so much that the Corporation did not avail itself
of its statutory powers.

After a delay of two years, when it was recognized that the Cor-
poration would take no steps in the matter, Hugh Myddelton or
Middleton proposed that, on a transference of the acts being made
to him, he would undertake to construct the required channel, within
three years from the date of the signature of the agreement. Accord-
ingly, on March 28th, 1609, a preliminary covenant was executed and
a more formal indenture on April 21st of the same year, followed by
a third dated March 28th, 1611 ^

Middleton underestimated the cost of acquiring the land necessary
for the channel. Although he had compulsory powers for taking ground,
the owners impeded him in several ways, and many of them endeavoured
to obtain abnormally high prices for the portions of the estates, pur-
chased compulsorily. Thus the opposition to the progress of the work
was " very strong^" indeed in 1610 a bill was promoted in Parliament
to repeal the acts under which the construction of the channel was
proceeding. It was objected that the navigation of the river Lea
would be hindered, mills and meadows decayed and the adjoining lands
impoverished ^ To this it was replied that the enterprize would be
highly beneficial to the health of the City, in giving wholesome water
to the poor; it would also be advantageous in cleansing the sewers,
cooling the streets in hot weather, for extinguishing fires, besides being
convenient for cattle^. On the one side it was argued that the City
should not have transferred its powers to a private entrepreneur-^ while
upon the other it was contended that, if he proceeded with the work
after the Council had refused to undertake it, his success would be all
the more creditable. Besides, attention was drawn to the injustice to
which Middleton must be subjected, were the parliamentary powei-s
cancelled, since he had already expended considerable sums and at the
date of the controversy was employing 1,700 men*. Though the bill
was not passed, the opposition was sufficiently powerful to cause delay,

1 4 James I.^ c. 12.

2 Matthews, Hydraulia, p. 45 ; London and the Kingdom, by Reginald R. Sliarpe,
1894, II. p. 21.

3 Copy of the Charter of the New River company: Guildhall Library MSS., No.
190, printed in The London Water Supply, A Retrospect and a Survey, by R. Sisley,
1899, Appendix.

* Objections against the New River : MS. Tanner (Bodleian Library), 98, & 48,
49, State Papers, Domestic, James L, lxxviii. 106.

^ Benej&ts of the Proposed New River : MS. Tanner, 98, f. 47.
^ The State of the Case concerning the Waterwork: MS. Tanner, 98, f., 113.

2—2

20 The New River Company [div. vi. § 3

and on February 27th, 1611, Middleton was forced to apply for an]
extension of time to complete the work.

The attempts made to impede the progress of the enterprize arej
probably not without bearing on the next important event in the
history of the New River. This was the execution of agreements on
November 1st, 1611, and May 2nd, 1612, whereby the Crown, by
undertaking certain financial responsibilities, acquired a moiety of the
whole undertaking. There is reason to doubt whether the account,
given of the motives which led to this transaction, is altogether comw
plete. It is said that Middleton had found the cost of construction
much larger than he had expected, and that, after selling shares, his
resources were exhausted and hence he was compelled to appeal to
James I. for financial assistance. It will be shown below that the
whole original capital expenditure was surprisingly smalP, and it would
not have been outside the capabilities of even a small company. Still
more significant is it that it does not appear that Middleton sought
monetary assistance from the City Council, to whom it might have
been expected he would have first applied 2. Moreover, from the state
of the Exchequer at this time^, it is certain that no unhesitating
reliance could be placed on any financial promise made by the Crown,
and therefore, on the whole, it seems probable that the main motive
for the agreement was the necessity of securing the intervention of the
King, in order to overcome the objections of powerful landowners
whose estates were to be intei^sected by the channel.

The indentures between James I. and Middleton provided that the
latter should convey one-half of the whole enterprize to the Crown; the
King, on his part, undertaking to pay Middleton one-half of all the
outlay already incurred and to provide one-half of such funds as were
needed to complete the work*. It follows then that the whole enter-
prize was divided into two equal moieties (and similarly the capital
expenditure from the beginning till completion) and that one of these
was assigned to the King and the other to Middleton. Further, it
was not long before the second moiety was sub-divided into thirty-six
parts or shares and these, as will be seen, constituted the New River
company^.

Once the support of James I. had been secured, the construction
proceeded rapidly, and the New River water was admitted into the
reservoir at Islington on Michaelmas Day, 1613. Though the main

1 Vide infra, pp. 21, 31. ^ Sharpe, London and the Kingdom, 11. p. 23.

3 Vide supra. Part i.. Chapter vii.

* Indenture between James I. and Hugh Myddleton, May 2, 1612: State Papers,
Domestic, Close Roll, No. 2,115 (10 James I., Pt, o).
^ Vide infra, p. 22.

Div. VI. § 8] Original Capital Outlay 1609-18 21

capital expenditure had been finished by this time, Middleton experi-
enced considerable difficulty in obtaining the calls, due on the King's
moiety, from the Exchequer. It is true that orders were punctually
made, as each considerable section of the channel was finished^, but a
considerable period elapsed before all of these were duly honoured, the
final payment only having been made on September 22nd, 1617. There
is a complete account of the total sums handed to Middleton, which was
made up in 1631, consisting of sixteen separate payments (the first of
which was made on xVugust 26th, 1612) varying from ^£^1,000 each down
to 1^242. lav. S^d, and amounting in all to ^,262. 9*. bU^ This fixes
the initial capital outlay which may be detailed as follows:

Original Capital Expenditure on the New River.

£ s, d.

The King's Moiety 9,262 9 6

The adventurers' moiety, consisting of 36 shares of a par

value of £257. 5*. 9frf. each 9,262 9 6

Total of both moieties £18,524 19 0

Considering the later history of the New River, this result appears to
be almost ridiculously small. Further too, it is much below a number
of estimates, framed on various bases, about the beginning of the
nineteenth century. According to the figures, given by the company,
the original cost of construction was at least ^^500,000. This cal-
culation was issued in an Address- to Occupiers of Houses, during a
period of somewhat acute controversy on the water-question^; and, in
view of the circumstances, it would be unreasonable to expect greater
exactitude than in the electioneering address of a candidate for a seat
in the House of Commons. William Matthews, writing in 1835, places
the original cost between ^^00,000 and ^200,000^ Possibly the excess
of these estimates, over the actual original expenditure, is accounted for,
partly by their neglecting the lower scale of wages in the first quarter
of the seventeenth century, partly too by the tendency to endeavour to
arrive at the expense of reconstructing the undertaking, rather than to

^ Issties of the Ejcehequer being payments made out of his Majesty's Revenue during
the Reign of James L, by Frederick Devon, 1836, pp. 156, 172, 190.

2 State Papers, Domestic, Charles I., cci. 22; cf. An Abstract or Brief Declara-
tion of the present State of his Majesties Revenew, with the Assignations and Defalcations
upon the Same, 1651, p. 15; History of England, 1603-16, by S. R. Gardiner (edition
1863), II. p. 420,

^ Reports from Parliamentary Committees, Session 1821, v. p. 75.

^ Matthews, Hydraulia, p. 57. There is a calculation, starting from the terms
of the assignment of the King's moiety to Middleton in 1631, in "Papers relating to
Water Companies" at the Guildhall Library, vol. iv., which estimates that the value
of the share at that time, for the purpose of this transfer, was taken at £280.

22 The New River Company [div. vi.

discover the outlay on making it as it was in 1613, from which date
onwards large sums were disbursed in improvements. However this
may be, it is important to notice that the original capital expenditure
of ^^18,524. 19,9. can be supported to some extent from contemporary
and independent sources. Taking the number of men employed byfl
Middleton, the time of construction and the rate of wages, the sum so
arrived at, as spent on labour, would leave an ample margin to meet
the cost of the acquisition of land and other expenses. Further, there
is the positive information that the whole expenditure on the first ten
miles of the New River was d£'3,000\ This was approximately one-
quarter of the total length, but it is to be remembered that land would
rise in value nearer to the city, and that provision must be made for
the supply of mains and service pipes, also for the loss of time before
James I. countenanced the undertaking, so that, allowing for these
considerations, the recorded figure of c^l 8,524. 19*'. would, on this basis,
just about suffice for the completed enterprize.

Not only was the assistance of James I. important in enabling the
New River to be finished, but it was helpful in many ways during the
earliest years of its history. On the one hand he supported the venture
in which he was interested; while, on the other, he discouraged rival
concerns. Further, the citizens were urged to use the New River water
in their houses, and in 1617 the King again aided the partners of
Middleton in certain transactions relating to a water-house at Dow-gate,
besides impeding another source of supply, which had been proposed
at South wark ^ A more signal mark of the royal favour was manifested
by the grant of a charter of incorporation on June 21st, 1619. This
document is unique, since it was obvious that James I. could not in-
corporate himself, and therefore it applies only to the thirty-six original
shares into which Middleton's moiety was divided. The owners of
these comprised the corporation which was entitled the Governor and
Company of the New River brought from Chadwell arid Amwell to
London. This grant recapitulates and confirms the powers, conferred
on the City, and sanctions the transfer of them to Middleton. In the
preamble, it is explained that, by reason of difficulties and delays, the
charge had been greater than was expected and that Middleton had
been forced to assume partners. Although the New River water had
been available for some years, the supplying of it had not as yet yielded
the profits anticipated, " partly from expenses daily arising far greater
and heavier than were expected, partly from want of government.''

1 The State of the Case concerning the Waterwork : MS. Tanner, 98, f. 113.
The same statement {i.e. that the first 10 miles cost £3,000) also occurs in the
Repertory of the CJity, vide Sharpe, London and the Kingdom, ii. p. 22.

2 A History of Private Bill Legislation, by F. Clifford, 1887, ii. pp. 73, 74.

Div. VI. § 3] Kiiig's Moiety transferred 1631 23

It was, ostensibly, to remedy the latter defect that the charter was
granted. It ordained that the officials of the company should consist
of a governor, deputy-governor and a treasurer. At all general meet-
ings five shareholders or adventurers constituted a quorum. It was
also declared that no person or persons, other than the company, might
"bring any river to London,"" without its consents In 1621 a bill
was promoted to confirm the privileges of the company. Another
effort was made in 1623, and again in 1642, to obtain parliamentary
sanction of the transfer of the powers granted to the City, but without
success^.

The earliest information of the return from the New River consists
of the income received by the Crown on its moiety in 1623, which
amounted to ^£325^ This would give a dividend of a little over £^
on each adventurer's share, being a yield of under 4 per cent, on the
original nominal value; that is only about one-third of the return
which might have been expected on an investment of a similar degree
of risk. Though exact particulars are not procurable, it can be shown
that income had accrued since 1615, for as early as that date there
were arrears of water-rents. The next light obtainable on the financial
status of the concern covers the years immediately preceding 1631.
Charles I. had now entered on his career of personal government and,
owing to his difficulties with Parliament, was anxious to "improve"'''
his revenue. Most of the "branches" were investigated, in order to
discover where an increase might be obtained, and, amongst these, was
the King's moiety in the New River. P'irst of all, the cost of this
investment was ascertained, and it is from the itemized account that
the original expenditure is arrived at^ Further, the income was ex-
amined and, though the statement (if one was prepared, as is probable)
has not been discovered, certain deductions founded on it are extant.
The arrears from 1615 to 1630 were very large, being as much as
^^2,580. 0^. Sd. in sixteen years. Thus the Crown had lost temporarily
one-half of this (or <£*1,290. 0*. 4d), or at the average rate of about
-£'85 per annum. Further, since the King's moiety did not form part
of the property of the company, a special surveyor was appointed to
represent the Crown, who was paid .^'lOO a year. The income received
(presumably after providing for this charge) "did not come one year

1 Charter, ut supra.

2 Journals of the Home of Commons, i. pp. 611, 727, n. p. 554.

3 State Papers, Domestic, James 1., clviii. 59; Gardiner, History, 1628-37
(1877), II. p. 344. The King's moiety was subject to a charge of £100 for
a surveyor, but it is to be inferred that the revenue in the text is the income before
deduction of this expense.

* Vide supra, p. 21 .

24 The New River Company [div. vi. §

with another to dfi^SOO,'^ so, that, while the accounts showed a credit
of approximately ^485 in favour of the Crown, the amount of the
arrears and the expense of the surveyor reduced the nett income to
about i?300. In view of these considerations, Charles I. expressed a
wish that Middleton should " reduce his moiety into a constant revenue/'
The method adopted, to effect this object, was an ingenious one. The
Crown conveyed its moiety to Middleton by a grant dated November
15th, 1631; Middleton, on his part, guaranteeing the Crown an annuity
of ^500. Middleton intended to subdivide this moiety into thirty-six
shares and to charge these with an equal proportion of the annuity.
Therefore the position in 1631 was that each of these new shares would
be subject to a liability of ^£^13. 17*. Off/.; whereas the average dividend,
on the adventurers' shares for some years before, had been only about
£\\. 9^. Sd. In order to provide an immediate prospect of some in-
come for the purchasers of the shares, into which the King's moiety
was to be divided, it was further agreed that the Crown should grant
to Middleton all the arrears due to it, and these were to become the
property of the new shareholders \ Since further the annuity was
guaranteed by Middleton, personally, it was charged on all the shares
he possessed at the time the arrangement was made. It happened that
some of the shares in the King's moiety had been already sold and so
escaped this charge, known as the " King's Clog," which was levied on
29 J "King's shares" and 1^ "Adventurers' shares." Thus, while the
clog was levied in this manner — on most of the " King's" and on some
of the adventurers' shares — the former class as a whole continued to
be outside the incorporation, that is, for instance, without powers of
voting for the election of officials.

The speculation of taking the risk of providing the annuity to
the Crown of £500 was soon justified by results. The population of
London was increasing, and was returned at 700,000 in 1636^ The
dividend on adventurers' shares had been only ^14Mn 1635 but it had
risen to <£33 in 1640.

With regard to the financial history of the company, it is thus
evident that the disposal of the King's moiety constituted a turning
point in its progress. The same remark is true of the legal status,
though in this case the turning was in the reverse direction. During
the reign of James I., the company had enjoyed a full measure of royal
support, but in the time of Charles I. and the Civil Wars, it had to
encounter the opposition of the heads of the State. James I. had
discouraged rival schemes, while Charles I. fostered and encouraged

1 State Papers, Domestic, Warrant Book, No. 30, Grant to Middleton, Nov. 15,
1631. 2 Londinopolis, by James Howell, 1657, p. 403.

* Omitting shillings and pence.

Biv. VL § 3] Position and Profits 1631-90 25

them. Thus, in 1631 — the year of the sale of his moiety — he em-
powered Edward Stradling and his partners to convey spring water
from Hoddesdon in Herts., subject to an annual payment of ^^4,000
to the Crown ^, and in the same year he made a grant to Edward Main-
waring (whose name is associated with a scheme for supplying Chester
with water) to raise a lottery for a new water undertaking at London I
Again in 1641 there were two rival proposals for conveying water to
London from Hertfordshire, neither of which appears to have been
accomplished^.

The most successful period of the operations of the New River
company, during the first hundred years of its history, was that from
the Great Fire up to the formation of numerous rival companies in
1692-3. One effect of the Great Fire was to injure the conduits,
which had afforded a free, if scanty supply previously. In the rebuild-
ing, owners of new houses would be ready, even anxious, to have
supply-pipes laid in. When this opportunity came to the proprietors
of water-supply undertakings, the New River alone was prepared to
take advantage of it. The prudent financial methods adopted had
placed the company in a strong position, while its few rivals were in
embarrassed circumstances. The owners of the London Bridge works,
for instance, found it an arduous matter to rebuild their pumping-
station, without trying to extend their mains ^ Another company or
partnership, of which Sir William Smith and Sir John Hooke were
members, had been competing with the New River company ; and it
was ordered on September 2nd, 1668, by the Privy Council that a
committee should fix a scale of reasonable rates, so that neither under-
taking should undersell the other. After more than a month no
appearance had been made by Smith, and the New River company
complained that this delay had hindered the laying of mains ^ By
1680 the dividend had increased to c^l45. 1,9. 8^^. per share: this being
about ten times the amount paid in 1635 and four times that of 1640.
No mention of the price of the shares has been discovered relating to
this time, but it would appear that any shares sold from 1680 to 1690
may have changed hands at about ^4,500. At this price, the dividend,
required to give a moderate return, would need to have been higher
than that paid in 1680, but there is every reason to expect that it
continued to increase till about 1693.

It was not long before the great growth in London water companies,
towards the close of the seventeenth century, began to affect the profits

^ Fcedera, xx. p. 246.

2 State Papers, Domestic, Charles I., cLxxvn. 46; Calendar , 1629-31, p. 553.

^ Matthews, Hydraulia, p. 32.

^ Vide supra, p. 12. ^ Add. MS. (Brit. Mus.) 15,858, f. 184.

26 The New River Company [div. vi. § 3

of the New River company., The York Buildings undertaking had
been established in 1675 and was transferred to a company in 1690.
In the latter year, the Shad well company was incorporated, and about
1692 the Hampstead Aqueducts and City Conduits were rebuilt by
progressive companies. The remodelling of old sources of supply by
Soames and the eventual amalgamation of these and the London Bridge
works in 1701 were especially dangerous. He gave his consumers
very favourable terms, and it is recorded that the effect of this keen
competition had been to produce a great fall in the shares of the New
River company \ In 1698 a price of about d£*4,000 a share is mentioned,
and in 1700 there is record of a dividend of £91\ per share being paid.
In 1708 the shares were spoken of as " being somewhat more valuable,*"
than had been the case recently, and the price then was about 4,500
guineas 2.

From 1700 to 1720, the profits appear to have been fairly steady ;
or, if there was a fall, it had been recovered at the later date, but,
in view of the increase of building about London, it is a significant
commentary on the effects of competition that the dividend of 1720
exceeded that of 1700 by less than £^. Thus in forty years from 1640
to 1680 the dividend had quadrupled, in the twenty years from 1680
to 1700 it was increased by one-half, and in the same period from 1700
to 1720 by only one-seventieth =*. The next price obtainable after 1720
was mentioned in 1739 and it was c£*5,250. A great part of the
increase, over that recorded in 1708, is to be attributed to the fall in
the general rate of interest on capital.

The competition of the water companies, at the beginning of the
eighteenth century, no doubt brought better terms to the consumer,
but in another respect he suffered considerably. The Londoner of the
present day makes many complaints, concerning the disturbance of the
streets through repairs of water, gas and electric mains, but the state
of the thoroughfares, owing to repairs of pipes two hundred years
ago, must have been something which at present it is difficult even to
imagine. All mains, at that time, were made of wood, generally of
the trunks of elm trees, to which leaden service pipes were connected.
The extreme life of these wooden pipes did not exceed twenty years,
sometimes it was as little as three years. It often happened that the
company, prior to 1810, had to lay over twenty miles of mains in a
year. Another peculiarity of early water-supply arose out of the fact,
that it was difficult to obtain tree-trunks that would give a sufficient
bore and it became necessary to lay several sets of mains in the
same street. When a leak occurred, all of these had to be examined,

1 Anglice Tutamen, p. 27. ^ Hatton, A New View of London, p. 792.

3 Vide infra, Summary of Capital a/nd Dividends, p. 31.

BIT. vi. § 3] Competition in Water Supply 1693-1720 27

and sometimes as much as 200 yds. of roadway was opened up for
nearly a month. To modern ideas this would be unbearable in a
district, served by a single company; but when the undertakings,
formed in the reign of William III., were competing for consumers,
it happened that two or even more companies would lay mains in
the same street. When all these were subject to the same rapid rate
of depreciation, but requiring renewal at different times, the streets
were probably more often opened up than available for traffic. The
companies too suffered from their defective mains, as it was estimated
that, of the water that was delivered into the mains, only about 75 per
cent, found its way into the cisterns of consumers.

In order that the relation of companies to the water-supply of
London may not be left in a fragmentary condition, it is necessary to
continue the history of the New River company beyond the year 1720.
That epoch, so full of disaster or at least of change for the companies
of the time, left the bona Jide water companies almost unaffected. It
is true that, for reasons explained elsewhere % the York Buildings
company was made a medium of extensive speculation ; but this was
attributable to its character of a land-development, rather than to that
of a water company. Besides the New River and the York Buildings
companies, there were the London Bridge, the Hampstead Aqueducts,
the Shadwell and St Paul's, the Chelsea companies and a number of
private undertakings. Of these the most important were the New
River and the London Bridge companies, but it would be a great
mistake to suppose that the former occupied the leading position that
it held at the end of the nineteenth century. On the contrary, the
general opinion in the time of William III. and Queen Anne was that
the London Bridge company, as reorganized by Soames, was the chief
water company. Allowing for the fact, that much of the capital outlay
on the city conduits, incorporated into this system, had been borne by
the corporation for which the company paid interest in the form of
rent, it is probable that the whok capital expenditure on this under-
taking was larger than that on the New River. It had the advantage
of at least eight different sources of supply, which tended to diminish
the cost of laying pipes, and the management had the reputation of
being far-seeing and less exacting than that of the older company.
Thus it required about a century for the New River to thoroughly
establish itself, and it was only after the first quarter of the nineteenth
century that the remarkable improvement in dividend and price of the
shares began.

The recent appreciation in the shares, as a species of property, has
been so remarkable that one loses sight of the slow steps by which it
1 Vide infra, Division xii.. Section 2 b.

28 The New River Company [div. vi. § 3

has been reached, and the large number of causes which contributed
to this result. Besides, the development of the undertaking in the
nineteenth century was conditioned by its history in the eighteenth.
The position of the supply of London, north of the Thames in 1720, ^
was instructive. There were four companies and several individuals ■
authorized to lay pipes and provide water. Each of them was subject
to competition from one or more of its rivals, and it is doubtful
whether the gain in cheapness to the consumer compensated for the
inconvenience of the general public. Unless each undertaking was
content to confine itself to a comparatively small area, there was bound
to be competition until the stronger company had absorbed its rivals.
The struggle between the chief combatants lasted for over a hundred
years, and, before it was finally concluded, a new era of strife began
in the nineteenth century. The conditions that made for success in
the competition of the eighteenth century were partly natural advan-
tages and partly skill in management, including prudent finance. The
New River company was favourably situated in respect to its supply,
but not remarkably so. The New River proper, that is the springs
conveyed from Chadwell and Amwell, could not long have sufficed for
the growing demands made upon them. The wisdom of the committee
was shown in the early supplementing of the original supply by a new
one, drawn from the Lea, and, by this acquisition, the company not
only strengthened its position but made it difficult for its competitors
to tap new sources on the north of London. Then in respect to capital
resources, the New River and Hampstead Aqueducts acted prudently
in placing themselves in a strong financial position, the York Buildings
company emerged from its speculative operations almost in a bankrupt
condition ; and the London Bridge, while forming some reserve, had
not made such liberal allocations to it as the two older companies
had done.

During the fifty years after 1720 {i.e. up to 1770) the New River
company just held its own. In that long interval the dividend improved
from £91^. \bs. l\d. paid in 1720 to i^255. 13^. \\(U in 1770— an
increase which was probably less than proportionate to the growth of
population in its district. But although no gain in profitableness had
been made, commensurate with the extension of building, all the con-
ditions were in existence for great future developments at the expense of
rival concerns. The New River company was in a position to increase
its supply with the growth of demand, whereas its competitors were not.
The extension of the suburbs rendered some of the springs no longer
available ; and, as time went on, water pumped from the Thames became

1 The dividends paid from 1770 to 1827 are given in Reports from Parliamentary
Committees, Session 1821, v. p. 206; ibid., Session 1828, viii. p. 56.

Div. VI. § 3] Extension of the System 1810-59 29

less and less desirable. Therefore, towards the close of the eighteenth
century, not only did the New River obtain the custom of most of the
new consumers in competitive areas, but it drew away business from some
of the other companies. The effect of these causes is shown both in the
growth of the New River dividend and (where information is available)
in the decline of the competing undertakings. It required fifty years
for the dividend on New River shares to increase (at 1770) by ^^40,
but in the eleven years from 1770 to 1781 it advanced by nearly d£>90,
or in other words the increase in eleven years was twice what it had
been in the previous fifty. By 1788 the distribution per share was
over =^400, and in 1794 it was more than double what it had been
in 1720, or more than half as much again as that paid in 1770.
The highest payment in this series was made in 1805, when it was
^486. 0.y. 0\d.

After 1805 the dividend remained over =£^400 until 1811. In the
latter year, there was an abrupt fall from ^^465. 0,9. ^\d. to d£^282. \%s. d^d.
The next year, 1812, the distribution was ^220. \%s, 2|J., in 1813
^113. 18*. l\d. and in 1814 only £^'6. 2,9. Id, The latter return was
probably the lowest for at least a century and was caused by a com-
bination of circumstances. In 1810 the company had begun to replace
its wooden pipes by iron ones, and at the same time there was fresh
competition from newly formed companies. That of the East London
company, which had been incorporated in 1807, was specially severe,
and the fight was waged so fiercely, on both sides, that a series of
Parliamentary Commissions were necessary to adjust the differences.

Although the events from 1810 to 1820 involved a temporary
reduction of the dividend, they eventually resulted in the great success
of the New River company. The completion of the recently in-
corporated undertakings led to the assigning of a general sphere of
territory to each surviving company, while the joint effect of new
capital outlay on iron mains and the excess of rivalry had been to
embarrass those, that were weakest, of the older companies. Of these
the least stable was the York Buildings company. Its directors, since
1719, had never paid much attention to the waterworks, their specu-
lations in land had failed, and by 1802 the debts so contracted had
been liquidated. The water-supply undertakings had long been let on
lease; and when, in 1818, the New River company had an opportunity of
arranging with the proprietors, it was decided to take advantage of it.
The agreement made provided for the leasing of the York Buildings
undertaking by the New River company for 2,000 years, on consideration
of the latter paying an annuity of o£'250. 18,?. Qd. to the holders of
certain York Buildings securities \

^ Vide infra, Division xii., Section 2 a.

30 The New River Company [div. vi. § 3

When it was decided to rebuild London Bridge, the New River
company acquired the London Bridge company's goodwill in 1822,
by paying an annuity of ^^3,750 (or 9,\ per cent, on the stock) for
the 260 years remaining of the lease granted by the City^ Having
made this arrangement, the New River company executed sub-contracts
with the East London company and the proprietors of the Southwark
Waterworks, which relieved it of d^l,220 of the guaranteed annuity.
In consideration of transferring to the East London company as m.uch
of the goodwill of the London Bridge undertaking as fell within the
district of the former, the New River company received £\Q0 of the
annuity, payable to the London Bridge shareholders, from the East
London company. On similar conditions, the proprietors of the South-
wark works undertook to pay <£*1,060 of the annuity, so that the
balance to be obtained by the New River company was only ^2,530.

The last of the early companies to be acquired by the New River
company was the Hampstead Aqueducts, which was leased in 1859.
This undertaking had remained in a sufficiently strong financial position
to be able to increase its supply by sinking a well in 1833% Its
dividend had improved steadily from 1801, and the New River company
found it necessary to undertake to make a considerable increase on the
dividends immediately before the transfer. The total annuity now
payable to the Hampstead Aqueducts shareholders is c£^3,500. This
yields £6. 10*. for the original ^^20 share, or 27^ per cent. As shown,
however, in the account of this company^, the true return is considerably
less than this, owing to all capital expenditure, after the formation of
the company, having been provided from undivided profits.

Some years prior to the acquisition of the Hampstead Aqueducts,
the New River system, as a modern water-supply undertaking, had
been welded together. The grant of a private act (which for the
first time brought the company under direct parliamentary sanction)
in 1852 may be taken as the outward sign of a new period in the
interesting history of this organization, which falls outside the scope
of this work^

1 Vide supra, p. 16. ''^ Vide supra, p. 8.

3 Vide supra, pp. 8-10.

* For the sake of completeness it may be added that the water-supply under-
taking, under the Metropolitan Water Act of 1902, has been acquired by the
Metropolitan Water Board. The company still exists to administer certain real
property, which was not included in this sale.

Div. vi. § 3] Capital, Dividends, Prices 1607-1770 31

Summary of Capital, Dividends and Prices of Shares.
Capital,

Original outlay, 1607-15.
Tlie King's moiety (converted in 1631 into 36 King's

shares)

The adventurers' moiety, consisting of 36 shares of an
original nominal value of £257. 6s. 9f rf. each, which
were incorporated in 1619 as the New River
Company

0,262 9 6

Total original outlay

9,262 9 6
... £18,524 19 0

Dividends and Prices of Shares.

Year

Dividend on an adventurer's share,
not subject to the " clog"
£ s. d.

Price of an
adventurer's share

1623

About 9 0 6

.?1630

„ 11 2 31

1633

1119 P

1635

14 14 3i

1640

33 2 83

1680

145 1 8

1698
1700

211 16 7i^

about £4,000*

1708
1720

214 15 7F

4,500 guineas^

1727

—

5,000 guineas ^

1739
1754

—

£5,250 »
about £5,000 »o

1770

255 13 11"

£6,700^2

I Vide aupra, p. 24.

'^ History of the Parish of St Mary, Islington, by S. Lewis, 1842, p. 428. In 1634
sufficient arrears had been collected to enable £3. 4.S'. 2d. per share to be paid on
account of these.

^ History of the Parish of St Mary, Islington, by John Nelson, 1811, p. 166.

• A True copy of the several affidavits and other proofs of the largeness and richness
of the mines of the late Sir Carbery Price, p. 2.

^ Lewis, History, ut supra. ^ Hatton, A New View of London, p. 792.

^ Nelson, History of ..Islington, p. 166.

^ Lewis, History, ut supra. '-^ Maitland, History of London, p. 629.

10 Ibid., p. 1270.

II Reports from Parliamentary Committees, Session 1828, viii. p. 55. Lewis gives
the dividend on a King's share in 1766 as £154.

1'^ Lewis, History, ut »upra.

SECTION IV. OTHER LONDON WATER-SUPPLY
UNDERTAKINGS.

The Governor and Company of the Waterwork and
Water-houses in Shad well (patent 1681, incorporated
1691).

The Borough Waterworks, Southwark (founded about
1690).

Marchmont's Waterworks (1694).

Savory's Waterworks (about 1708).

Besides the various companies already mentioned, there were some
other undertakings which, in the fifty years prior to 1720, supplied
water to certain districts in London.

One of these was the Shadwell company which was originated by
Thomas Neale, who about 1681 obtained a patent authorizing him to
construct waterworks at Shadwell to supply the manors of Stepney and
East Smithfield^ Neale, unlike some other patentees, had devoted
himself to the work for which he had obtained privileges; and, by 1691,
he had not only erected works and laid pipes into the East London
district, but had, by " costly experiments,"" found out an improved
method of supplying Southwark with water, "sweet and clear^'' In
the following year, he obtained a private act incorporating himself and
his partners in the Shadwell undertaking, with the usual privileges,
as the Governor and Company of tlie waterwork and water-houses in
Shadwell^ with the right of electing a governor and twenty -four
assistants^. In 1754 the supply was drawn from the Thames by means
of two steam-engines and distributed by mains of 7 in. bore"*. Towards

^ Reports Hist. MSS. Com.y xiv., Pt. 6, p. S8 ; Journals of the House of Commons, x.
p. 679.

2 State Papers, Domestic, Petition Entry Book, i. p. 176; Calendar , 1690-1,
p. 497.

3 Report.s- Hist. MSS. Com., xiv., Pt. 6, p. 83.
* Maitland, History of London, p. 1272.

Div. VI. § 4] Other London Water Works 1681-1822 33

the end of the eighteenth century, the same causes that had injured
other undertakings, which drew water from the Thames, affected this
company; and, besides, its business was injured by the West Ham
company, so that it became necessary to make a call on the proprietors \
For a number of years the undertaking was in an embarrassed condition
and its business was finally taken over by the East London company.

Neale's petition, offering to supply Southwark with water, shows
that, at the beginning of the reign of William III., it was considered
there was still room for a water company south of the Thames. At
the time the City authorities were disposing of the right to supply
certain districts, an offer had been made by a group of partners for the
privilege of working in this district at a fine of ,^550 and a rent of
£^50 a year, but they failed to find water and retired from the enter-
prized Thereupon William Gulston took a lease of the south arch of
London Bridge and erected water-houses, besides laying great numbers
of "pipes and trunks.'"* In 1691 he was supplying the parishes of
St Olave and St Saviour, and he petitioned for powers authorizing him
to open streets for the laying of pipes ^ On August 28th a warrant
was signed for the preparation of a bill, granting him these powers*.
In 1770 a steam-engine was erected to improve the pumping^ and in
1822 a portion of the goodwill of the London Bridge company was
leased by the New River company to the proprietors of these works ^

In 1708 the inventor Savory had a steam-engine at work, which
supplied a part of Southwark''.

A somewhat interesting undertaking was one founded in 1694 by
Hugh Marchant, Marchmont or Merchant, Craven Howard and a
number of other persons, who had obtained the right of using all
common sewers within the Bills of Mortality, excepting those in the
City, to generate power for the pumping of water from the Thames.
The rent payable was five nobles a year for 99 years ^ By January 5th,
1696, the partners had erected pumping-houses near Tom's Coffee
House, at St Martin's Lane and Hartshorn Lane in the Strand", and they
petitioned for the right to lay pipes. In 1754 the power derived from
the sewers was supplemented by a windmill at Tottenham Court Road
Fields ; and, at that date, the company owned three mains of 6 inches
and 7 inches, and it was in a position to divide profits to the members^".

1 Observations on the Establishment of New Water Works Companies (Guildhall
Library). 2 stow, Chronicle (ed. Strype, 1754), p. 29.

3 State Papers, Domestic, Will, and Mary, Petition Entry Book, i. p. 178;
Calendar, 1690-1, p. 499.

4 Ibid., H. O. Warrant Book, vi. p. 165; Calendar, 1690-1, p. 503.
^ Chronicles of London Bridge, p. 567-

6 Vide supra, p. 30. ^ Hatton, A New View of London, p. 797.

8 State Papers, Domestic, Will, and Mary, Petition Entry Book, iii. p. 97.

9 Maitland, History of London, p. 1268. ^^ ^^•

S. 0. III.

SECTION V. WATER-SUPPLY UNDERTAKINGS IN
PROVINCIAL TOWNS.

Chester. P. Mainwaring and others (1634).
Newcastle. William Gray (1646).

"Folly Waterworks" (1680).

W. Soulesby (1694).

W. Yarnold (1697).
Derby. G. Sorocold (1693).
Liverpool. Water Company (1695).

Cleave Moore (1709).

Outside London there was considerable activity in the supplying
of towns with water. As early as 1634, there is a record that Philip
Mainwaring (who had a scheme for a London undertaking^) was
interested, with others, in a water company at Chester^

There is also fairly complete information as to the early supply of
Newcastle-on-Tyne. In 1583 the town was supplied by three conduits,
but by 1647 there was great scarcity, owing to one of these having
been declared dangerous to health, and the springs that fed the others
having been impaired by the sinking of coal shafts^ On July 26th,
1647, the Corporation agreed to grant certain waste land, known as
King's Dykes, to William Gray, in return for "his conveying water
from his conduit in Pandon Bank to Sand-Gate^" Evidently this
measure only provided a temporary relief, for in 1671 it was necessary
for the magistrates to prohibit the use of taps in private houses. In
1680 Cuthbert Dikes proposed to supply the whole town by means of
an engine pumping water from the Tyne. This engine was erected
outside the Sand-gate**. Cuthbert Dikes formed a company to carry

1 Vide supra, p. 25. The Christian name of the promoter of the London scheme
is entered in the grant as "Edward/' but there is reason to beheve that the person,
referred to in the text, is intended.

2 State Papers, Domestic, Charles I., cclxiii. 7; Calendar, 1633-4, p. 513.

3 History of the Trade and Manufactures of the Tyne, Wear and Tees, 1863,
p. 190.

* The History and Antiquities of the Town of Newcastle, by John Brand, 1789, i.
p. 443.

^ Ibid., p. 444.

Div. VI. § 5] Provincial Water-Supply Companies 35

out his agi-eemeiit with the magistrates and started operations, it is
said, with a subscribed capital of =£'3,500 ^ The water suppHed was
not acceptable to the townspeople, and the undertaking was described
as the "Folly Waterworks." The company transacted business for a
number of years, and then leased its works to William Yarnold for
^40 a year. On the failure of Yarnold's venture, the company resumed
possession and carried on the concern until the great frost of 1739,
when the works suffered severely, and the prospects were not sufficiently
encouraging to lead the proprietors to incur the expense of making the
extensive repairs which were necessary 2. In 1827 the minute books of
the company were still in existence, but all attempts to trace them
have failed ^

In 1694 there were fresh complaints of the scarcity of water, and
the Council treated with William Soulesby for conveying a supply
from springs at Castle Leazes^ In 1697 William Yarnold, who was
known as the inventor of a pumping engine, brought a scheme before
the Council, and on October 11th an agreement was made with him,
which provided that, on his supplying the town with good wholesome
drinking water, he should receive a lease for 300 years, at 13.y. 4^. per
annum, of all waste ground, outside the city walls but within the liberties
of the town. The Corporation also granted him full powers of laying
pipes, but subject to the rights of existing undertakings. Yarnold's
scheme was to sink wells and raise the water by means of his engine,
which was capable of raising 120 tons of water 300 feet in an hour^
The site, chosen for the wells, was at a place known as Waterworks
Farm, about three miles from Newcastle ; and, as the land required was
outside the jurisdiction of the Corporation, it became necessary to apply
for parliamentary powers, which were obtained in 1698-9^. Yarnold
discovered good water and succeeded in conveying it to the City in
elm-wood pipes. He found, however, that the supply failed in the
summer, and he was forced to rent the Folly Works. Yarnold ulti-
mately sold the undertaking, which was acquired by a new company
formed in 1734 ^

Mention is made in 1693 of the enterprise of George Sorocold for
supplying Derby with water and at that date mains and service pipes
were being laid. Houghton says that it was probable "this supply
would be much used^""*

1 Hist, of the Trade of the Tyne, p. 190. ^ Ibid., p. 191.

3 Descriptive Account of Newcastle-on-Tyne, by E. Mackenzie, 1827, p. 725.

* Brand, History, ut supra, i. p. 44o.

° London Gazette, No. 3581, Marcli 4, 1700.

6 Statutes, VII. p. 450. ^ Hist, of the Trade of the Tyne, p. 191.

8 Collections, No. 37, April 21, 1693.

3—2

36 Provincial Water-Supply Companies [div. vi.

The wave of industrial activity, that was so marked about London
from 1690 to 1695, extended to Scotland and the provinces. In 1695
a group of "men from London'"* undertook to supply Liverpool with
drinking water, obtaining from the Corporation a lease empowering
them to lay pipes for 100 years. They failed to accomplish the project,
and in 1709 Sir Cleave Moore proposed to bring water from Bootle.
An act was obtained authorizing the acquisition of lands, but Moore
failed to float the company, which was to provide the necessary capitals
During the remainder of the eighteenth century, Liverpool was " scantily
supplied"" with water by the agency of water carriers ^

1 History of the Commerce and Town of Liverpool, by Thomas Baines, 1852, pp.
349, 350.

2 The History of Liverpool, 1810, p. 208.

DIVISION VII.

POSTAL AND STREET-LIGHTING COMPANIES.

SECTION I. COMPANIES FOR THE CONVEYANCE
OF LETTERS AND PARCELS.

The Undertakers for Reducing the Postage op Letters

TO Half the Former Rates (1651-3).
The Undertaking of the Penny Post (1680-2).

After the Civil Wars, there was a considerable increase in the
demand for postal facilities. Up to the end of the reign of Charles I.,
the service had not proved self-supporting ; but, when Edmund Prideaux,
who had been appointed Post-master in 1644, had been in office for a
few years, he claimed that not only had the posts been augmented but
that they were maintained without a subsidy. Though improvements
had been effected, the service was not sufficient for the needs of the
time, and in 1649 the Common Council of the City of London estab-
lished a postal service to Scotland. The reason given for this step
was the infrequency of Prideaux' mails, which were only collected once
a week\ At this period the control of private correspondence by the
State was considered of great importance, in order that information
might be obtained as to the state of feeling in the country; and, on
the petition of Prideaux to the Council of State, the City post was
suppressed ^

In order to secure his monopoly, Prideaux had been compelled to
produce a statement of the revenue he derived from the posts, with the
result that the House of Commons exacted a rent of <36'5,000 a year from
him. The imposition of this annual payment, on the farmer, meant the
continuance of rates, which might otherwise have been reduced, had the
State made the latter alternative a condition in the renewal of its contract
with Prideaux. It appears, then, that the standard charge for a letter
would have remained at 6d. during the continuance of this farm.
A new phase of the situation came into existence through the formation
of a partnership, consisting at first of Clement Oxenbridge, Richard

1 The History of the Post Office, by Herbert Joyce, London, 1893, pp. 24, 25.

2 The Post in Grant and Farm, by J. Wilson Hyde, London, 1894, p. 224.

40 Co. for reducing Postage Rates 1652 [div. vii. § 1

Blackwell, Francis Thomson a^nd William Malyn, with the avowed object
of reducing the rate to 3cZ.^ and providing a more frequent service. The
first four partners were soon joined by others, and they developed their
postal system vigorously. It is remarkable that the new unauthorized
service was not interdicted ; especially, since as early as December 6th,
1652, it was proposed to borrow money, on the security of the rent
payable by Prideaux^. The probable reason of the inaction of the
executive is to be found in the fact that the new undertakers were
favoured by Cromwell and his party ^

Thus Prideaux was left to face the competition, that had sprung
up, as best he could. His agents circulated notices which stated that,
the new undertaking being unauthorized, letters consigned to it were
subject to detention, while " the old post will pass freely^'*' Efforts
were made to stop messengers employed by the new undertakers, with
the result that there were frequent collisions between the post-boys of
the rival services, followed by actions at law^ The "new post" was
still continued, and Prideaux was forced to reduce his rates and to provide
a more frequent service. To meet this reduction, the new undertakers
adopted the role of the champions of free enterprize, contending that
they were justified by " the light of nature in a free state," in opposition
to a grasping and greedy monopoly^. They appealed to the public,
stating that, as the benefit had come by their action, so its continuance
depended on the success of their enterprize'^.

The bitterness of the contest now extended to the servants of the
rival posts. Every messenger had to protect the letters committed to
his charge from the violence of his rivals. Even outsiders joined in the
fray. A son of one of the old postmasters assaulted a messenger of the
new undertakers with a sword, and soon afterwards one of their men was
murdered when in charge of the mails. The campaign, as conducted by
Prideaux, not only included violence against his competitors but also the

^ The former rate had been Qd. for a single letter for places 100 miles distant by
post route from London, that of the new undertakers was 3d for 80 miles and over,
and 2d. for lesser distances.

2 Journals of the House of Commons, vii. p. 226.

3 State Papers, Domestic, Inter., lxvii. 65; The Case of the First Undertakers for

adducing of Letters to half the Former Rates truly Stated Brit. Mus. '-^ — .

* To all Ingenious People — A Second Intimation from the New Undertakers for
conveyance of letters at half the rates to Severall Parts of England and Scotland [1653]

Brit. Mus. ^ — . As far as can be discovered no copy of a first intimation is

in existence.

fi IUd.\ State Papers, Domestic, Inter., lxvii. 65; Calendar, 1654, p. 23.

^ State Papers, Domestic, Inter., lxv. 51 (1); Calendar, 1653-4, p. 373.

7 To all Ingenious People — ut supQ-a, State Papers, Domestic, Inter., lxvii. Q5.

Div. ^^I. § 1] Co, for reducing Postage Rates 1653 41

forcing of their employees to observe the Sabbath, while the letters com-
mitted to him were hurried forward on the " day of rest." In spite of
all obstacles, the new undertakers continued to maintain their service
and, on the dissolution of the Long Parliament, they received the State-
despatches, both ordinary and extraordinary. Having met with this
measure of success, they published their Second Intimation to all ingenious
People, announcing that, on and after April 28th, 1653, letters would be
conveyed from London on Tuesdays, Thursdays and Saturdays. Prideaux
now retired from the contest, and the undertakers took the old posthouse,
provided packet-boats for the Irish service and laid plans for organizing
a stage from I^ondon to Yarmouth.

The success of the partnership was destined to prove the cause of its
downfall. Though Prideaux received little support from the government,
the Council of State was forced to take action, when the rental from the
farm of the posts was in danger of being lost. It was decided that
tenders should be invited for a new farm. The undertakers showed that
their whole charge and losses had been £5,146. 10s. 8d., their returns
were dfi'1,907. 14^. 5d., leaving a balance of nett loss, at this date, of
^3,238. 16.9. Sd.^ They were called before the Committee of the Council
of State, that had been appointed to consider the farming of the posts ;
and, according to their account of the interview, they were assured that
they should have the refusal of the farm and that, if their offer was not
accepted for any reason, they should be reimbursed their expenditure.
Accordingly, the company agreed that one of the shareholders, named
Benjamin Andrews, should offer a rent of i^9,100 a year, which it was
stipulated was to be devoted to the relief of disabled soldiers. Owing to
the financial necessities of the government 2, this proviso was considered
objectionable. A Captain John Manley was favoured by the Committee,
but his tender was less than that of the undertakers. An arrangement
was however made, under which Manley was permitted to raise his offer
to the highest amount handed in. This was <^10,000, and, after half-an-
hour's deliberation on June 29th, 1653, the Committee accepted Manley,
as farmer of the inland posts ^ This was followed by an order to the
undertakers, dated the following day, commanding them to hand over all
letters to Manley at midnight-*. The undertakers considered that they
were aggrieved by this decision, since they contended that, if credit was
given them for their outlay (as they said had been promised), their offer
was in reality better by .^2,000 than that finally made by Manley^ In

1 State Papers, Domestic, Inter., lxv. 51; Calendar, 1658-4, p. 372.
^ Vide supra, Part i. , Chapter xiii.

3 State Papers, Domestic, Inter., xxxvii. 152-8; Calendar, 1652-3, p. 450.
* State Papers, Domestic, Order of Council of State, June 30, 1653; Calendar,
1652-3, p. 456. ^ Ibid., lxvii. 66-8; Calendar, 1654, p. 25.

42 Co. for reducing Postage Rates 1653-4 [div. vii. § 1

the brief space left them, before the order of the Council was to take
effect, they pleaded vainly for a postponement of the hour of transfer,
but the most that they could gain was a grudging permission to deposit
the moneys belonging to the post-office in the custody of an impartial
person, pending the confirmation of the Order of the Council. While
this arrangement was being made, other events were in progress, which
made the evening of June 30th a stirring one. Manley had mustered
and armed a following, consisting of his friends and servants of the "old
post." This body marched on the head-quarters of the undertakers,
made a forcible entry, seized the books and ejected the clerks who had
been in possession. Some of the leading shareholders had assembled at
the house of one of their number in Wood Street, to which some letters
for the outgoing mail had been removed. Manley, hearing of this, broke
into the house, secured the letters and pursued his rivals, who were com-
pelled to barricade themselves in a room, to which they had retreated.
It was by these drastic methods that the transfer of the posts was
effected \

The undertakers, having been forced to resign possession, endeavoured
first to obtain redress, petitioning the Council of State on January 30th,
1654, but without results Afterwards, they attempted to secure a
reimbursement of their outlay, but the Committee of Posts reported
adversely on March 13th^. Technically, Oxenbridge and his partners
were interlopers, who carried on an unauthorized service. Since Prideaux
had been legally appointed farmer in consideration of his paying a sub-
stantial rent, he should have been supported by the executive. Such
support not being forthcoming, the undertakers were able to show that
there was a reasonable probability that, in time, the reduction of rates,
which they had inaugurated, would result in an increase of revenue. By
establishing this principle, they had performed a public service ; and, after
the Revolution, this was recognized in the case of one of the founders of
the enterprize. Oxenbridge was then an old man in straitened circum-
stances, and he was allowed £60 a year from the profits of the post-office.
After his death this pension was continued in favour of his widow*.

For more than twenty-five years the history of the post-office consists
first of efforts to improve the organization, and subsequently to increase
the revenue obtainable (which had been settled on the Duke of York

^ State Papers, Domestic, Inter., lxvii. 65 ; Calendar, 1654, p. 24.

2 xi^cL., Lxv. 51; Calendar, 1653-4, p. 372.

3 Ihid., LXVII. 69; Calendar, 1654, p. 25.

* Treasury Papers, xliii. 58 ; Calendar, 1697-1702, p. 13. For a short time after
the Restoration, Oxenbridge was employed in the post-office, but his name does not
appear in a list of the officials compiled about the end of 1661 — The Post in Grant
and Farm, pp. 257-9. A good account of the organization of the " New Under-
takers" is given in this work, pp. 225-33.

Div. vn. § 1] Undertaking of the Penny Post 1679 43

after the Restoration) on the basis of maintaining the existing rates.
The increase in the number of letters in England during the reign of
Charles II. was described by a contemporary writer as being "so
prodigiously great that the Post-Office was farmed at =£^50,000 a year\"'''
As yet, however, London itself was poorly supplied with postal facilities.
Letters, written in one part, had to be sent to another by means of a
special messenger, either by a servant or by a porter. The officials of
the post-office were far from recognizing that a new class of business was
waiting to be developed, and it remained for a private company to
establish a local post for London. This scheme was under consideration
in the closing months of 1679 and early in 1680^ Many claims have
been advanced on behalf of different persons as being " the inventor " of
the new post, which was eventually established at a penny rate. The
names of three men, who subsequently became important promoters of
new enterprizes, are frequently mentioned in connection with the incep-
tion of "the Penny Post.'' These were Hugh Chamberlain, Robert
Murray or Moray and William Dockwra^. The adjudication between
the claims, made on behalf of each, is complicated by the fact that most
of the information relating to this enterprize is derived from statements
furnished by Dockwra, and there were reasons which led him to give the
maximum degree of weight to his own share in the founding of this post.
On the other hand, the question is simplified to some extent when it is
noted that the idea of a penny -post was not a new one, having been
formulated in 1659 by John Hill of York''. The idea having been in
existence for a considerable time, it is by no means improbable that it
may have occurred to several persons that the period from 1679 to 1680
was a suitable one to put it into practice. From the connection of
Chamberlain and Murray with various financial schemes it may be
inferred that it was to these that the proposal for insuring the contents
of letters up to a value of d^lO was due'^, while Dockwra was responsible

1 The Merchant's Dayly Companion, by J. P., London, 1684, p. 388; cf. Financial
Statements L and M.

2 Anthony A. Wood gives the date as "the latter end of 1679." Athena
Oxoniensis, London, 1817, m. p. 726. Tliis may mean January to March 16,|§.

3 As to Chamberlain— ITercwrms Civicus, No. 4, April 1, 1680, London Gazette,
No. 1614, May 20, 1680; as to MxirTaj— Inquiry into Authenticity of certain
Miscellaneous Papers .. .attributed to Shakespeare, by Edward Malone, 1796, p. 387;
Anderson, Annals of Commerce, iii. p. 88 ; Wood, Athence Oxoniensis, iii. p. 726.
In the latter it is said that Dockwra lost the benefit " by a wrong name only," Anglia
Metropolis, p. 345: as to Dockwra vide subsequent references, and Daily Courant,
No. 229, Jan. 11, 1703; An Essay upon Projects [by D. Defoe], 1697, p. 27.

* A Penny Post, London, 1669 [Brit. Mus. 1391 . e . 25].

s Murray is said to have been the founder of the "'Bank of Credit," while an
account of Chamberlain's Land Bank will be found infra, Division x.. Section 2.

44 Undertaking of the Penny Post [div. vii. § 1

for the actual organization of the system by which letters were collected
and delivered \

Early in March 1680 the scheme was well advanced. A company was
formed, and an elaborate constitution appears to have been under con-
sideration, since it was at one time proposed to have trustees in addition
to a committee of management^, it being the duty of the former to hold
certain property or security, vested in them, to ensure the payment of any
claims that might be made on account of letters or parcels lost in transit.
Since the preliminary outlay was very small, it would not be necessary to
subscribe capital at the beginning ; but, once operations had been begun,
it was found that the receipts did not meet the expenses, and the deficiency
had to be provided by the shareholders. Thus the initial cost of estab-
lishing the enterprize, arrived at in this way, would constitute its capital.

The scheme was conceived in a liberal spirit. The service was made
available to the public on Lady-Day (March 25th), 1680. The sum of
1^. would pay for the collection at any one of the receiving-houses (of
which there were eventually 400) and for delivery at an address within
the Bills of Mortality. Further, this rate would secure transmission to
the places of collection in Hackney, Islington, South Newington Butts
and Lambeth, or, if the addressee desired his packet to be left at his
residence, this further service could be obtained by the payment of an extra
penny. Collections and deliveries were to be made frequently daily,
except Sundays and the following holidays — three days at Christmas,
two days each at Easter and Whitsuntide and January SOth. Besides
letters, parcels (not exceeding 1 lb. in weight and ^10 in value) were
taken at the rate of \d. each, and the undertakers engaged to compensate
the owners of such packets as were lost in their post ; there being no extra
charge for such insurance ^

The company soon found itself confronted with numerous difficulties.
Though the idea of a cheap local post had been long under consideration
amongst men of enterprize, there were many who regarded the project as

1 Thus Dockwra stated a previous scheme " was rejected as impracticable^ as
indeed were all the rest of their notions, nor ever was by any of them [i.e. Foxley,
Henry Neville, Payne, Murray, Chamberlain] or any other person whatsoever, put
into any method to make it practicable." Daily Gourant, Jan. 11, 1703.

2 Hugh Chamberlain was to have been one of the Trustees. This is said to have
been his only actual connection with the founding of the undeiiaking. London
Gazette, May 20, 1680.

3 A full account of the organization of the penny post is given by Harry J. Maguire
in William Dockwra and the London Penny Post of 1680 {Gibbon's Monthly Journal,
xviii. pp. 16, \1, 67-9, 89, 90). I am much indebted to Mr Maguire for his
furnishing me with valuable information in addition to that contained in this article,
also for reading this account in MS. and making several suggestions. Many of the ''\
sources of information referred to below have been printed in the Stamp Lover, No. 1,

et aeq. Cf. Joyce, History of the Post Office, pp. 33-42.

Div. vn. § 1] Orgmuzation and Prospects 1679-80 45

chimerical — like " those others we have formerly heard of, sailing against
the wind or paying debts without money i.'' The chief obstacles consisted
in the want of numbers on the houses (which made accurate and quick
delivery troublesome) and the hostility of the porters, who had formerly
derived employment from the carrying of letters. Sympathizers spoke of
the "ruine of the poor porters^," who revenged themselves by tearing
down the signs, used to distinguish the receiving-offices, until they were
deterred by* prosecutions at the Sessions I The delay, occasioned by the
want of a precise system of street-numbers, became a frequent source of
complaint, and the company had to publish advertisements asking the
indulgence of the public until the service was fully organized and its
letter-carriers became more experts

In one important respect, the company found itself in a dilemma. To
attract custom, it was necessary to advertize, and accordingly notices were
inserted in the papers before the offices were opened; while, during the
first months of the history of the post, every excuse was taken of drawing
public attention to it in the press % while a broadside was printed for
gratuitous distribution I The danger of publicity, however, was that it
was likely to bring the venture under the notice of the Duke of York,
since it might be contended that his monopoly was infringed. This
monopoly, too, was not so much important on its financial, as on its
political side. The control of the public correspondence was regarded
as an important asset in maintaining the position of any party or
interest in the State, and, since the Penny Post began its career at a
time when public opinion was excited by rumours of Popish Plots, it
was perhaps not unnatural that the opponents of the company should
point to the encouragement its service gave to correspondence regarded
as treasonable^ nor that the Duke of York might be tempted to seize
the undertaking in order to obtain control of the local correspondence of
London. Whatever may have been the cause, an action was brought

1 Smith's Currant Intelligence, No. 15, March 30, 1680. For the first project cf.
The Century of Inventions, by the Marquis of Worcester, 1663, No. 15, in The Life
of the Second Marquis of Worcester, by Henry Dircks, 1865, pp. 407-8 ; Anderson,
Annals of Commerce, in. p. 73. The second project may be that of M. Lewis. Cf.
Proposals., for a large Model of a Bank, 1678, Brit. Mus. 1139. f. 19.

2 The True News or Mercurius Anglicus, No. 37, March 24, 1680 ; Smith's Currant
Intelligence, No. 15, March 30, 1680.

' Smith's Currant Intelligence, No. 14; Mercurius Civicus,'No. 12, April 27, 1680.

* Mercurius Civicus, Nos. 6, 12, April 6, 27, 1680.

^ Ibid., Nos. 1, 2, March 22, 24, 1680.

« A Penny Well-Bestowed, or a Brief Account of the new Design, Contrived for the
ffreat Increase of Trade and Correspondence, 1680, Guildhall Library.

' The True Domestick Intelligence, No. 79, April 2, 1680 ; Smith's Currant Intelli-
gence, No. 15, March 30 ; Mercurius Civicus, Nos. 3, 4, March 29, April 1, 1680 ;
Heraclitus Ridens, March 1, Dec. 27, 1681.

46 Undertaking of the Penny Post [div. vii. § 1

against the company as infringing the rights of the General Post Office.
It is probable that very soon after the scheme was advertized legal proceed-
ings were threatened and one suit was heard before the end of March 1681 ^
The combined effects of the dread of a powerful opponent and the
continual drain of the payments necessary, on the part of the shareholders,
to meet the weekly bill for wages had frightened many, who abandoned
their shares and withdrew from the company. Murray, though not
deterred by these causes (since he set up a rival post-office in Wood
St.)'^, also retired from the partnership^, and Dockwra alone remained.
The date of the dissolution of the first penny-post company can be fixed
within certain limits as follows. The history of the first year of the
enterprize is described very fully by De Laune on the authority of one
of "the gentlemen concerned" (who was certainly Dockwra). In this
account it is said that the undertaking was " little more than a year old.''^
Since it began on March 25th, 1680, De Laune's account must have been
written about April 1681 ^ At this time a second company had come
into existence which probably began business on Lady-Day, 1681.
Dockwra, according to De Laune, had carried on the post at his sole
charge "for above half a year." Taking Dockwra''s period of sole-
proprietorship at seven or eight months, this leaves four or five months
as the duration of the first company, which would thus have been
dissolved in July or August 1680. There are no very definite particulars
of the loss made by the first company. The charge for the first year is
given in general terms as being " some thousands of pounds''," and the
bulk of this would fall within the earlier months, at which time it seems
probable that the receipts were, on an average, less than half the out-
goings. On the basis of the results achieved by Dockwra in the next
seven or eight months, it may be estimated that the loss of the first
company would be close on ^2,000 ^

1 The Present State of London, by Thomas De Laune, 1681, p. 350.

2 Maguire, William Dockwra, ut supra — Gibbons Monthly Journal, xviii. p. 68.

3 Dockwra stated publicly that certain articles of co-partnership between himself
and Murray (presumably those for the undertaking of the penny post) liad been
*' sacredly kept on his part, but never performed by Murray." Daily Courant, No.
229, Jan. 11, 1703.

* This date is confirmed by the fact that De Laune speaks of the future appear-
ance of a small tract. This was evidently The Practical Method of the Penny Post,
the MS. of which possibly formed the basis of his account. Now on March 29th,
1681, it was announced that this pamphlet would appear " in a few days" — " Advice
from the Undertakers of the Penny Post," in The Protestant Domestic Intelligence,
No. 109.

5 The Practical Method of the Penny Post, 1681, Brit. Mus. 8245. g.Q (reprinted
in The Stamp Collector, ix. pp. 47, 98, 99, 113-16).

8 Taking the duration of the company at 20 weeks, the expenses at £160 a week
and the average receipts at f of the expenses : vide infra, p. 47.

Div. vn. § 1] Income and Expenditure 1680-1 47

Dockwra, being left to carry on the enterprize at his own risk,
devoted his whole time to it\ He complained of the rival scheme of
Murray as being a great discouragement of his invention I While, even
at a later date, he found some houses " so sottish as not to take letters in
even gratis," and he recommends a correspondent " to cast no more of
your pearls before such swine^" Some, if not all, of the expense of the
costly law-suit with the Duke of York had to be borne by Dockwra, but
as against this outlay it was thought in 1681 that the legal position of
the Post had been established^. The revenue was increasing, though,
after the undertaking had been six months in Dockwra's hands, it did
not as yet suffice to answer three-quarters of the expenses. It is possible
to make some attempt to reconstruct the financial position of the post at
this time, on the basis of a number of statements made at a later date by
Dockwra"*. While these apparently differ in the total sum, which he
alleges he lost by the undertaking •*, they all agree in stating that the
money he found, together with interest at 6 per cent, to 1690, amounted
to d^4,400. It follows that the capital sunk by him would be £%60(i.
By far the greater part of this outlay would have been incurred during
the period he was sole proprietor, and therefore, it may be inferred, that
as much as =^2,000 is to be assigned to this period. Further, it is
recorded that, at the end of that time, the revenue was barely three-
quarters of the charges''; and, if it be assumed that Dockwra was sole
owner for 32 weeks, it is probable that at the beginning of this interval
the proportion would be about one-half. It follows then that the ratio
of income to expenditure may be averaged at five-eighths from the middle
of August 1680 to Lady -Day 1681, and therefore the total expenses per
week would have been approximately ^166^. To a certain extent this
calculation can be verified from other sources. It has been estimated
that the staff employed by the Penny Post numbered 300 persons'.
About this time the wages, paid by the General Post, varied from 10*.

1 A True State of the Hard Case of Wm Dockwra that set up the Penny Post in
1680 and which the late King James ravisht from him : Treasury Papers, xliv. 56.

2 De Laune, The Present State of London, p. 350.

3 Letter of WiUiam Dockwra, ^^ Author of the Penny Post," to John Houghton,
25th April, 1698 ; [Brit. Mus.], Stowe MS., 747 . f. 93.

* De Laune, The Present State of London, p. 350.

5 Treasury Papers, xliv. 56, lxxx. 55 ; Journals of the House of Commons, x.
pp. 226, 384.

8 To this amount Dockwra adds £4,000, as representing the salary he should
have received and, in petitions after 1690, interest to date. He deducts " the present
value" of his pension and the salary he received as comptroller.

7 De Laune, The Present State of London, p. 350.

8 I.e. Expenses £5,330, Receipts £3,330(|): Loss £2,000(|).

* Maguire, William Dockwra — Gibbons Monthly Journal, xviii. p. 17.

48 Undertaking of the Penny Post [div. vn. § 1

to Qs. a week\ If Dockwra paid his people on an average 8*. a week, his
wages bill would be £1^0 a week, in addition to which he would have
to pay something to the tenants of the receiving-houses, provide for
compensation for lost parcels, as well as for law-costs and for the
remaining incidental expenses. Thus it is not improbable that his
whole weekly outlay would have been between £\50 and ^^175.

In March 1681 Dockwra had sunk more than ^£^2,000 in the post^
and he had brought it to a point at which it was likely a profit
would soon be earned. His circumstances were such that he could not
continue to provide the deficiency, that still had to be found, as he was
already largely in debt^ Since the prospects for the future were pro-
mising, he was able to form a new company, being joined by several
partners " who were all natives and free citizens of London ^.'''' There is
no information as to the arrangement made between Dockwra and those
who united with him. Having spent so much on the venture, it would
be disadvantageous for him to share the prospective profits with othei*s,
unless the new members on their part paid him a sufficient amount to
cover a portion of the cost of establishing the business. This method
was adopted in other cases ; but, at the same time, it is to be remembered
that Dockwra was in difficulties, and he may have been forced to admit
the new shareholders, on condition that they would each provide a pro-
portionate share of the weekly deficit but without paying anything
towards such goodwill as had been established.

The new company described itself as William Dockwra a7id the rest
of the Undertakers of the Penny Post, and, judging by the efforts made
to effect improvements and to draw public attention to their service, the
date of the transfer may be fixed as having been on or about the first
anniversary of the establishing of the post, namely March 25th, 1681.
The deliveries were augmented and quickened. It was now announced
that the average time occupied by a letter in transit, within the Bills of
Mortality, should have been three hours. To meet the complaints of
delay, a system of post-marks was invented, which showed the hour at
which a letter had been received at some one of the sorting-depots*.
Evidently there had been both bogus and excessive claims on account
of lost parcels, and it was now stipulated that compensation was not

1 The Post in Grant and Farm, by J. Wilson Hyde, London, 1894, pp. 297-8.

2 I.e. £2,000 during the time he was sole proprietor and his proportion, as a
shareholder, of the previous loss which was altogether of about an equal amount.

3 Journals of the House of Commons, x. p. 384.

* De Laune, The Present State of London, p. 350 ; The Practical Method of the
Penny Post, ut supra.

^ These are reproduced in Joyce, History of the Post Office, p. 38; Gibbon's
Monthly Journal, xviii. p. 67.

Div. VII. § 1] Attacked by the General Post 1682 49

recoverable, unless the packet was securely sealed and the nature of the
contents endorsed on it\

Signs are not wanting that, as both the public and the letter-carriers
became acquainted with the conditions of an expeditious service, the
Penny Post became increasingly popular. It is probable that, before
the end of the year, some small profit was being made. It was soon
found that the new postal facilities had made possible new methods of
business. Thus, when in April 1682 it was proposed to float a new
subscription of East India stock of 3 millions, it is noticed that the
post was used to reach persons who were thought likely to become
adventurers 2.

By 1682 the undertaking was yielding a profit, and the farmers of
the General Post again took action against the London enterprize.
Proceedings were begun by Lord Arlington, and the case was heard
in Michaelmas term at the King's Bench in 1682. It was claimed that
the Penny Post was an invasion of the monopoly of the conveyance of
letters, settled on the Duke of York, and £%bQ(} was sought as
damages, besides .^'lOO per week as the receipts of the undertaking in
the Westminster district. It was argued on behalf of the company that,
in cases where in any town no local post had been established, the
monopoly did not apply and such enterprize might be lawfully carried
on by private individuals. On behalf of the Postmaster-General it was
pleaded that such possible exception only held good in places, which
were not reached by the routes of the General Post, and that, since this
was admittedly not so in London, the company had invaded the mono-
poly. By the verdict of the Court the company was exempted from the
damages claimed but was fined £100 for contempt of courts

The decision of the King's Bench was announced in the last days of
November 1682 and the company was in an exceedingly difficult position.
At this time, it is related that the post " had been brought to good per-
fection and began to bring in a small profit '' towards the reimbursement
of former losses " with hopes of future recompense*.'' It is possible that
those shareholders, who had joined the second company, may have been
receiving an income on their investment, but it is clear that Dockwra

1 The Protestant {Domestick) Intelligence or News Both from City and Country, No.
109, March 29, 1681 ; Smith's Protestant Intelligence, No. 19, March 31, 1681 ; The
Practical Method of the Penny Post, ut supra.

2 London Mercury, No. 4, April 20, 1682. With reference to this proposed issue
of East India stock, vide supra, ii. p. 143.

3 State Papers, King's Bench, coram Rege, Roll 2023, mem. 24— Hulkes v.
Wm. Dockwra.

4 Journals of the House of Commons, x. p. 226. It may be noted that in this case
(as elsewhere, when Dockwra .says the Post was "set up at his sole charge") he
assumes that the whole loss was his.

s. c. III. *

50 Undertahing of the Penny Post [div. vii. § 1 —

himself could not, as yet, have obtained enough to make any great .
reduction in his loss as sole proprietor and as a partner in the first
company.

The members of the undertaking doubtless feared that such profits,
as were being made, might be swallowed up in law costs and damages.
By November 27th the General Post Office, in advertizing the decision
of the King's Bench, gave notice that it would " forthwith *" establish a
penny post and would employ those " lately '' in the service of the com-
pany^, whence it is to be inferred that at this date Dockwra''s organization i
had suspended its service. The revived delivery of letters at a charge of ^
Id, within the specified area, was announced to begin on December llth^,
and this event involved the frustration of the last hopes of the
company.

Since the enterprize was taken over by the General Post Office without
any compensation being paid to the shareholders, it is likely that the
second company, like the first, sustained some loss. For a time after the
shareholders in this body had joined it, they had to meet the losses on
the service, but towards the end of its existence a profit was being
made. But, in so far as the whole nett revenue of the Penny Post
from March 25th, 1686, to March 25th, 1687, was under <^800, it is
obvious that any balance of profit in 1682 over the losses from March
1681 can only have been very small. Further, from this must be
deducted the expense of the law-suit in 1682, so that on the whole
the second penny post company was probably not profitable as an
investment. Such however was not the judgment of some of those
living at the time. In 1698 this undertaking was one of those men-
tioned, in conjunction with the New River and Hudson's Bay enterprizes,
in which the adventurers had made large profits^. In so far as there is
any foundation for this statement it may be based on the pension granted
to Dockwra personally of ^^500 annually for ten years, in addition to
which he received a salary as comptroller of the Penny Post, and, after
he was dismissed from this office, the promise of other employment under
the State. His own account of the financial results of his connection
with the Penny Post up to 1697 was that his loss and interest thereon at
6 per cent, up to 1690 was i^4,400 ; to this he added ^4,000 to cover the
time he had devoted to planning and managing the undertaking for
three years from the end of 1679 to 1682 and also the expense of

1 Lmdm Gazette, No. 1776, Nov. 27, 1682.

2 lUd,, No. 1779, Dec. 7, 1682.

3 A True Copy of Several Affidavits and other Proofs of the Largeness and Richness

qfthe Mines of the late Sir Carh&ry Price Brit. Mus. '^-'^

DiY. VII. § 1] Financial Results 51

re-establishing his business connection for a year afterwards. This made
.5^8,400, from which he deducted the capitalized value of his pension,
which he placed at <^2,400, making his loss, to 1690, i^6,000. There
was still to be added interest on the balance from 1690 to 1697, which
was placed at J'2,500, giving a total nett loss, according to this mode of
statement, of ^8,500\

1 Treasury Papers, xliv. 56.

4-2

SECTION 11. STREET-LIGHTING COMPANIES.

The Proprietors of the Convex Lights or the Partners

IN THE Convex Lights (1684-1744).
The Proprietors of the Light Royal (1687-94).
The Proprietors of the Glass Globe Lights (1692-3).

The civic authorities in London had made efforts from time to time
to secure the lighting of the streets. As early as 1599 an order was
made by the Common Council that householders should hang from their
dwellings " a good substantial Ian thorn and candle " between October 1st
and March Ist^ After the rebuilding of London in the reign of
Charles II., there was a tendency to improve the state of the thorough-
fares, chiefly with a view to the prevention of murders and robberies.
Means to give effect to this improvement were found in the enterprize of
individuals, who were willing to contract with householders to light and
extinguish the lanterns required by the City Council. Thus in 1682 a
group of persons, who described themselves as the Proprietors Jbr the
Lights, advertized that they were prepared to perform this service^. As
yet, however, nothing of the nature of a street-lamp had been invented.
Samuel Hutchinson claimed the distinction of having discovered a method
for " the great and durable increase of light by extraordinary glasses and
lamps, very useful for... ship's lanterns, lighthouses and dispersing of light
in mines and other necessary and like profitable uses^." Hutchinson was
in pecuniary difficulties, and he arranged that a patent should be applied
for by Edward Windus. This grant, which was signed on February 27th,
1684, conferred the sole right of using this invention, in England and
Wales for the ensuing fourteen years, on the patentee, his assigns and
those duly authorized by him.

Hutchinson's method of increasing the efficiency of light consisted in
the use of convex reflectors, which were probably of glass, and therefore
his system was known as the " convex lights '"' or " convex glasses." It

1 Minutes of the Common Council^ Guildhall Library, xxv. f. 98.

2 Domestic Intelligence, No. 132, Aug. 24 to 28, 1682.

3 Patent Roll, 36 Charles II., Pt. 6, No. 23.

Div. vn. § 2] The Convex Lights Company 1684-94 53

soon appeared that there was scope for the improved scheme of street-
lighting, and there were ample indications that many householders would
be willing to pay a small sum annually to Hutchinson, provided he
undertook to supply and maintain lamps of the new type, besides lighting
and extinguishing them. At this stage the enterprize entered on a new
phase, for which some capital was required to provide the necessary
materials, as well as a system for organizing the work of the lamp-
lighters. Hutchinson himself was without resources and he was joined
by others, who furnished the necessary funds. At first the undertaking
was divided into four parts, and one of the original partners, John Reeve,
found it incumbent on him to take proceedings in Chancery to obtain a
title to his share in the business. It was not long before sales of sub-
divisions of the original quarter-interests were made, and eventually an
arrangement was effected, by which the benefit of the patent was regarded
as divided into 32 shares \ Of these Hutchinson owned 12 up to 1692,
when he was forced to raise money by mortgaging two of them, leaving
him with power of disposition over 10 shares ^ The average amount, that
he had received for the 22 shares which had passed out of his possession,
was c£^29 per shared It seems probable that the whole calls ordered,
until some time after the Revolution, were £1^0 per share, which would
make the paid up capital at that time over ^^5,000. There is one element
of uncertainty in this calculation. It is based on the fact that the total
amount called up on each share in 1695 was ^£^800. Through certain
circumstances to be detailed below ^, Roman Russell became possessed of
a share early in 1694, and he complained that the amount he had to
" reimburse "" the company, as calls, came to c£'640. This share had been
transferred by Hutchinson out of the two he had mortgaged, and it may
have been that some of the calls, due on it at the time it was handed over,
had not been paid. If this were so the capital called up by 1690-1 would
be proportionately larger than ^5,000.

Just when the company was beginning to succeed, it found itself faced
by the competition of Edmund Hemming, who had invented another type
of street-lantern, which he named the " Light Royal.'' This scheme is
said to have been in operation in 1687^ and Hemming applied to the

1 Hist. MSS. Com.— The Manuscripts of the House of Lords, 1693-5, i. p. 373.

2 Chuiicery Proceedings, Mitford \^^.—The Severall Answers of Samuel
Hutchinson Gent, one of the defendants to the bill of Arthur Moore Esq. and
Roman Russell Gent.

3 The Manuscripts of the House of Lords, 1693-5, i, p. 544. It thus appears that
the figure 22 in the MS. is correct and the suggested emendation to 32 in the Calendar
is not required.

* Vide infra, p. 58.

^ London and the Kingdom, by Reginald R. Sharpe, London, 1894, ii. p. 582
(note).

54 Street- Lighting Companies [div. vii. § 2

City Council for encouragement on October 15th, 1689\ At this time
the position of what was known as the Orphans'* Fund had become most
unsatisfactory, and the situation, which had arisen, eventually affected
the finances of both street-lighting and water-supply undertakings^ This
fund had been established for the supervision and administration of estates,
bequeathed to minors. At the Revolution it had been found impossible
to pay the claims of the beneficiaries, and, as the result of an investiga-
tion, made in 1689, it was discovered that the deficiency was about
d£^500,000^. The default was assigned to the loss of interest on monies
lent to the Crown at the time of the stop of the Exchequer in 1672, but
the full explanation depended on other events both of an earlier and also
of a later date. As early as 1642 the Orphans' Fund had been drawn
upon not only to provide a part of the contributions demanded from the
City at that time, but also, it was alleged, in the case of Major-General
Skipton, to furnish a pension of d£*300 a year^ It was said that payments,
from the fund to one applicant, were made out of the resources lodged
on behalf of others, who could not claim their principal until a later date,
and no doubt the insecurity of the fund was accentuated by the financial
expedients adopted by Charles II. in 1672. The last shock to the credit
of the Chamber came from its excursion into banking in 1681 and the
large withdrawals made in 1683, during the crisis of that year^ The
result of these successive adverse influences was that, in 1689, neither
principal nor interest could be paid to the Orphans^. Defoe describes
how the treasury of a great city " was shut up and forty thousand
orphans turned adrift in the world, some with no cloaths, some no
shoes, some no money ; and still the city magistrates calling upon other
orphans to pay their money in. These things put me in mind of the
prophet Ezekiel and methoughts I heard the same voice that spoke to
him calling me and telling me, 'Come hither and I will show you greater
abominations than theses'""' It remained for the City to obtain the
assistance of Parliament, in working out a scheme, which would meet
some of the liabilities that had matured. The fact that there was
competition in street-lighting suggested that a part of the revenue

^ Minutes of Common Council^ li. f. 12 b.

* Cf. supra, pp. 12, 33.

3 Sharpe, London and the Kingdom, ii. p. 545.

* A Letter from Mercurius Civicus to Mercurius Rusticus : Or London's Confession,
hut not Repentance, by Samuel Butler, 1643 (Somers' Tracts, 1750, v. p. 411).

* A Dialogue between Franciso and Aurelia, two unfortunate Orphans of the City of
London, 1690 (Harleian Miscellany, 1745, iv. p. 656).

" England's Calamities Discovered, by James Whiston, 1696, in Harleian Miscellany,
VI. p. 339.

7 The Consolidator or Memoirs of Sundry Transactions from the World in the Moon,
London, 1705, p. 75.

Div. viT. § 2] The Light Royal Company 1687-92 55

required might be obtained, by letting out the contract for this service
at a rent which could be devoted towards satisfying the claims of the
Orphans. In 1690 the Corporation repeated its former orders, requiring
householders to hang out lamps after dark from Michaelmas to Lady-Day
up till midnights Hemming had assumed partners for the development
of his invention and the company described itself as the Proprietors of the
Light Royal. This syndicate claimed that its lantern was superior to
that supplied by the Convex Lights company, in so far as it cast fewer
dark shadows. The terms made with householders were that, in con-
sideration of a fine of 5s. and an annual payment of a like amount, the
lighting company undertook to discharge the obligation, imposed by the
by-law of the Corporation, during the lighting-hours specified. As lamps
need not be lit on moonlight nights, the contract applied to 120 nights,
the charge for which, according to the proposals of the Light Royal, was
\d. per night for the first year, and ^d. per night for each of the four
subsequent years 2.

On September 6th, 1692, the proprietors of the Light Royal had
submitted proposals to the Common Council, stating that they were
prepared to supply lights at the current rates, consisting " of one entire
body of glass, giving light all round about and underneath, without any
darks or shades."" The proposed lanterns were to have an inscription on
them of the word " Orphans,"" and the promoters were prepared to pay
one-half of the clear profit to the Orphans' Fund. The company professed
itself so convinced of the advantages of its light that it asked no modifi-
cation of the existing regulations, only requiring that the Mayor and
Common Council should encourage the use of the lamp in London and
they were asked to aid in its adoption in the provinces, where it was
proposed the lights should be lettered "Disabled Seamen,'"* a "great
part'"* of the provincial profits being intended to be devoted towards
the erecting of a naval hospitaP.

Another offer came from the Glass Globe Lights. These lamps were
to be set on posts, 10 feet above the ground, so that there should be "no
dark shadows whatsoever but that the light shall be always clear and

1 A History of Inventions , by John Beckmann_, 1846, ii. pp. 178, 179.

2 AnglicB Metropolis, 1690, p. 365. In January 1693 the Proprietors of the Light
Royal advertized that " they had set up lights pursuant on the order of the Lord
Mayor on the Exchange and Cornhill," and, " whereas several of them had been
shot by bullets," a reward of £5 was offered for information which would lead to
the discovery of those who had fired the shots. London Gazette, No. 2839, Jan.
23, 1693.

3 Minutes of Common Council, li. f. 188 ; Proposals humbly offered for the better

lighting of all the Streets, Lanes, Allies and Public Courts within the City of London and

r . ^^ 816.m.9~l
the Liberties thereunto belonging Brit. Mus. ^ •

56 Street-Lighting Companies [div. vii.

§2!

equally dispersed... delightful and useful to passengers, without glaring
or dazzling the eye.*" The illuminant was to be rape-oil, with a cotton
wick, and it was provided that the glasses should be cleaned every night,
and the wicks snuffed as often as required. The charge for street-lamps
was to be 6s. per annum, for those in schools, churches, halls, 8*. The
rent of c£*800 a year was offered, provided that the City prohibited the
use of any other lights during the currency of the proposed grants The
latter condition could not be complied with, since the patent for the
Convex Lights was not due to determine till 1698, and nothing more is
heard of the Glass Globe company in these negotiations. The struggle
lay between the Light Royal and the Convex Light companies, and it
was announced on November 6th, 1693, that "new and advantageous
proposals had been received 2. " The Convex Lights company had been
somewhat slower than its opponents in tendering. Hutchinson, the
inventor, who was still a large shareholder, took the attitude that he was
entitled to enjoy the benefit of his patent for the residue of the term and
that the imposition of a rent was, in effect, to deprive him and his fellow-
shareholders of a portion of that benefit ^ There was however a difference
of opinion within the company. During the boom in the stock and share
market, there had been fairly numerous sales of shares in this undertaking,
which had changed hands at prices between £\fiOO and <i^l,500, repre-
senting a substantial premium on the sums called up, possibly as much
as 100 per cent."* Persons who had bought at a high price were only
exercising ordinary prudence, in endeavouring to effect some arrangement
which would secure the good will of the Corporation, before the patent
had determined. Moved by these considerations, it was decided by a
majority to offer a rent of <^600 a year for a contract of 21 years. This
offer was considered by the Common Council on November 24th, 1693°,
while, on December 13th, the Light Royal presented an amended pro-
posal which now took the form of a rent of ^"'1,000 a year, provided that
an act of Parliament or of Common Council was obtained " for raising
the yearly sum of .£'^3,000 from the inhabitants " of places which were
improved by the lighting". The proposition from the Convex Lights
company was clearly the more favourable, and it had the advantage of
the personal advocacy of thirteen prominent merchants (including mem-
bers of the Houblon family), who appeared before the Committee. On
a division, therefore, the contract was assigned to the Convex Lights

^ Proposals about Lights for this City Brit. Mus. —^ — .

2 Minutes of Common Council, li. f. 281.

^ Journals of the House of Commons, xi. p. 116.

^ The Manuscripts of the House of Lords, 1693-5, i- PP' 541-5.

^ Minutes of Common Council, li. f. 282 b.

8 lUd., LI. f. 284.

Div. TIL § 2] A Concession sought from the City 1692 57

company, subject to the assent of Parliament. The obtaining of such
assent was subject to two special difficulties — the one affecting the bill as
a whole, the other relating to the lighting clause only. The City had
promoted an Orphans' Bill in each session since 1691, only to discover
that " the cart was bewitched " ; because, " hitherto, they had sneakingly
with-holden the wonder-working guineas." There was a consensus of
opinion that the adverse spell must be lifted during the proceedings of
1694, and the Corporation on January 24th had authorized the Chamber-
lain to make such payments, as were required, in soliciting Parliament ;
while the Orphans, on their part, undertook to pay certain agents 5 per
cent, of the monies they received, on the bill being passed. A sum of
1,000 guineas was subsequently traced to Sir John Trevor, the Speaker,
and he was expelled from the Housed The main difficulty having been
surmounted, there remained a minor one, which it was feared at one time
would wreck the bill. Hutchinson, together with Arthur Moore who was
the mortgagor of two shares belonging to the former, had refused to
assent to the agreement with the City. As dissentient shareholders,
they prepared a petition, which was drawn up in the name of Hutchinson,
asking for a saving clause in favour of the inventor and requiring certain
concessions from the other partners 2. This petition was presented on
March 3rd, 1694, but the House was not satisfied as to the bona fides of
Hutchinson and Moore, and it was resolved on March 8th, by 138 votes
to 59, that his name should not be included amongst those mentioned in
the bill, as partners in the Convex Lights. The claim of Moore was dealt
with similarly ^ The Light Royal company also opposed this clause,
contending that the claim made on behalf of the Convex Lights, that
many thousands of pounds had been spent in developing the enterprize,
was misleading, in so far as the greater part of such outlay had been
partly on stock-jobbing the shares, partly on buying up competitive
lighting undertakings. It was also alleged that the Light Royal was
superior, inasmuch as it would be cheaper to the people and " did not
drop oil to the annoyance of any-body*."" It was possibly in connection
with the former complaint that, on March 25th, the secretary was ordered
to attend with the books ; but, the bill being hurried forward, there is
no record of the investigation having been made''. Hutchinson's opposi-

^ A Collection of the Debates and Proceedings in Parliament in 1694 and 1695 upon
the Inquiry into the Late Briberies and Corrupt Practices, London, 1695, pp. 11, 12, 16 ;
A Supplement to the Collection of Debates... upon the Inquiry into the Late Briberies,
London, 1695, p. 93.

2 Journals of the Hou^e of Commons, xi. p. 116. ^ Ibid., p. 122.

* Reasons humbly offered against the Bill for the sole use of Convex Lights or Glasses

Td : AT 816 . m . 13"|
I Brit. Mus. -^ J.

^ Journals of the House of Commons, xi. p. 281.

58 Street-Lighting Companies [div. vii. § 2

tion was not yet at an end. He was advised that it was necessary to
gratify some person, having influence, so that his case should be considered
in the House of Lords K Accordingly, on March 15th he executed an
assignment, authorizing Moore to dispose of one of his shares, with a
view to promoting his interest in Parliaments This share was transferred
to Roman Russell, who had influence with the Marquis of Normanby.
Hutchinson's petition was presented on the 17th, and his counsel was
heard on the 20th S Suddenly the clause relating to the Convex Lights
acquired such importance that it was thought the fate of the whole
measure depended on it. If the opposition was continued, it could be
represented that the company was not unanimous and, therefore, the
rent might not be secure. There was an excited body of persons, in the
vicinity of the House, consisting of the orphans, their agents, some of the
shareholders in the company and Hutchinson's friends. Normanby came
to them and declared that, unless the other shareholders came to terms
with Hutchinson, the whole bill would be lost. This statement increased
the perturbation of the orphans, who brought great pressure to bear on
the members of the company who were present. These deposed after-
wards that a reluctant consent was wrung from them by the fear of
violence. One of them, John Lilley, said that he was constrained to
sign owing to the orphans "pulling him and threatening him." Sir
Thomas Millington was " tossed about "" by the crowd, till he, too,
assented^. Immediately this settlement had been made, the bill pro-
ceeded swiftly, and it received the Royal Assent on March 23rd ^ The
clause, in its final form, was a confirmation of the lease made by the City
to the company for 21 years from June 24th, 1694, at the agreed upon
rent of £Q00 a year^. This measure was defined by an act of Common
Council, dated October 25th, 1695, which recapitulates the agreement
already reached and confirmed by Parliament in the previous year. This
covered the sole use "of all public lights in public places, within the City
and liberties " for the term of 21 years. Further, the former orders com-
pelling householders, whose dwellings fronted on any public thoroughfare,
to light the roadway, were repeated. The penalty of 1*. for each default
was to be exacted, unless those liable had agreed with the proprietors of
the Convex Lights to install and tend the necessary lamps''.

This act was the last step required to secure the legal position of the
company; and, in anticipation of obtaining such authorization, steps had

1 The Manuscripts of the House of Lords, 1693-5, i. p. 541.

2 Journals of the House of Lords, xv. p. 547.

3 The Manuscripts of the House of Lords, 1693-5, i. pp. 372, 373.

4 Ibid., pp. 544-5. 5 lUd., p. 372.

6 5 and 6 Will, and Mary, c. x., § 4 ; Statutes, vi. pp. 464, 465.
^ Lane Mayor — Commune Condi' tent' in Camera Gnildhald' Civitat' London ...An
Act of Common Council for Lighting the Streets [Brit. Mus. 1881 . b . 3 (9)].

Div. vn. § 2] Peers, Orphans and the Company 1695 59

been taken to make the resources of the undertaking adequate to the en-
larged field of its operations. Early in 1695, i^800 per share had been
called up. Thus the nominal capital was .£25,600 and this large sum
(in relation to the nature of the business carried on) lends some colour to
the allegations of the Light Royal that money was spent in buying up
competing concerns. About the same time the number of shares was
doubled and these, in the new denomination, sold at £^^^^. This price
was equivalent to par ; so that, as stated by the writer oi AngVwe Tutamen,
several shareholders had lost considerably 2.

It was scarcely to be expected that the majority of the company
would abstain from attempting to exact retribution from Hutchinson,
Moore and Russell. Possibly the excuse for retaliation was to be found
in the inability of some of them to pay the recent calls on their shares.
According to Russell's own testimony, as much as X^640 was due from
him for calls on the single share he had acquired. However this may
have been, the company refused to recognize these three as members.
They were not consulted at the time of the doubling of the shares, nor
were the accounts or documents submitted to their perusaP. It was
found necessary to institute proceedings in Chancery early in 1695.
When the bills, answers and cross-bills came to be filed, it was dis-
covered that the important fact had been divulged that Russell acquired
his share without giving any valuable consideration for it. Indeed
it was deposed that this share had been transferred in order that
" Hutchinson's interest in Parliament should be advanced ^'^ On this
statement being communicated to the House of Lords, the Peers decided
on March 25th, 1695, to institute an inquiry ^ Numerous witnesses
were called and examined on March 29th, April 1st, 8th and 9th. It
soon became apparent that Normanby was the peer whom Russell had
been induced to influence, and the investigation was merged in another,
which was examining the alleged too favourable terms, on which the
former had obtained the lease of a piece of ground from the City^ On
April 18th it was carried by a majority that "there was no just cause of
censure on the Marquis of Normanby," but at the same time there was
a powerful minority which entered a protest, contending that it was " an
extraordinary offence for a peer to deliver an opinion without doors,"" as
to the fate of a measure which was then pending ^ There is no evidence
to show whether the dispute within the company proceeded further.

1 The Manuscripts of the House of Lords , 1693-5, i. pp. 543-5. ^ p. 31.

3 Chancery Proceedings, Mitford ^jV-, June 11, 1695.— ''The Severall Answers
of Samuel Hutchinson."

* Ibid. ; Journals of the House of Lords, xv. p. 547.

6 Journals of the House of Lords, xv. p. 527. ^ I^id., p. 546.

7 Ibid., p. 557. The protesting Lords record that they helieved the share, assigned
to Russell, to have heen worth £2,000. ITiis appears to be due to a misinterpreta-

60 Street-Lighting Companies [div. vii.

After some conclusion had been reached, as between Hutchinson \
his supporters on the one side and the remaining members of the company
on the other, attention was given to the development of the business/
It is not improbable that this company bought out the owners of
the Light Royal, since Samuel Garret, who had been a supporter of
Hemming''s invention as one of the proprietors in 1693, appeared at a
later date as a shareholder in the Convex Lights \

Contemporary writers, at the beginning of the eighteenth century,
spoke of the light with a considerable amount of satisfaction. Guy
Miege described London as " being singular in the use of the Convex
Lights, commonly called lamps. Which give a great and extensive light
and are very convenient to prevent murders and other outrages, so
frequent in great and populous cities beyond sea'^." About this time
the office of the company was situated at the White-Hart on the East
side of Bread Street^, and the charge for a single lamp, outside a private
house, was 6^. a year^ By 1713 the rent had fallen into arrear', and on
June 19th, 1716, it was agreed that a new lease should be executed at
d£*400 a year, to date from Midsummer 1715^. On December 15th of
the same year it was determined that the acts, governing the lighting of
the streets, should be printed and circulated at the cost of the company ^
In view of the determination of the lease in 1736, a committee was
appointed on July 29th, 1731, to make enquiries and report as to the
best manner and method of street-lighting ^ The result of this investi-
gation was adverse to the Convex Lights company, whose methods were
then described as being subject " to great defects."" The company replied
that householders had lately contracted with diverse tin-men for the
lighting of their premises, and that this practice had not only diminished
the revenue of the undertaking but had also impaired the quality of the
lighting". Though proposals were submitted by this body, as well as by
a number of other undertakers, the corporation determined to change its
contractors, and in 1744 it was remitted to the aldermen and council of
each ward to let out the lighting, snuffing, cleansing, supplying, main-
taining and repairing of the public lamps ; but the annual rate was now
advanced to 38*.^"

tion of the evidence. Moore said he had been oiFered £2,000 for his holding {The
Manuscripts of the House of Lords, 1693-5, i. p. 545), but it will be remembered
Moore had two shares mortgaged to him, only one of which he transferred to
Russell.

1 Minutes of Common Council, li. f. 284, lvii. f. 236.

2 The Present State of Great Britain, 1707, i. p. 138.

3 A New View of London, by Edward Hatton, 1708, p. 785.
* Minutes of Common Council, lvi. f. 35.

^ Ibid. « Ibid., f. 226. ^ j^d,^ f. 259.

8 Ibid., LVII. f. 236. 9 Ibid., f. 348. lo Ibid,, lviii. f. 353.

DIVISION VIII.

MANUFACTURING AND MISCELLANEOUS COM-
PANIES IN ENGLAND AND IRELAND.

SECTION L THE GOVERNOR AND COMPANY OF
THE WHITE PAPER MAKERS IN ENGLAND.

The manufacture of paper had been established in England as early
as the reign of Elizabeth, if not before that time^ The industry increased,
and a century later there were upwards of a hundred mills at work 2. Their
output however was confined to the coarser kinds, such as brown paper,
and it was necessary to import the finer qualities from abroad. In
1673-4 the quantity of paper brought from France was 160,000 reams
which, at the valuation of 5s. per ream, amounted to £4iO,000 annually^ ;
while, later in the century, it was stated that the imports of this com-
modity cost as much as ^100,000 a year^. It is said that the first
attempt to produce the better kinds in England was due to E. Burnaby
in 1678, but his enterprize resulted in failure ^ In 1682 a further effort
was made to achieve success by George Hagar, who obtained a patent for
the sole production of white writing and printing paper for 14 years by
the method of " sizeing it in a mortar ^" A company was formed to work
the invention, and ^"^6,000 was paid by a number of persons for shares^
A mill was erected at Ensham and others were leased elsewhere^ For
some time a considerable trade was carried on, but Hagar's success came
to the notice of those persons who had made him bankrupt in 1677 and
these now attempted to make the funds of the company liable for his
by-gone debts. The shareholders were indignant and accused Hagar of
having obtained their money by means of fraud. It appears however that

1 In A Spark of Friendship (1588), in Harleian Miscellany, iii. p. 249, it is noted
that a paper-mill had been erected at Dartford by Spilman, the Queen's Jeweller,
cf. Paper and Paper-making Chronology j London, 1875, p. 20.

2 Reports Hist. MSS. Com.— The Manuscnpts of the House of Lords, 1690-1, xxii.,
Pt. v., p. 76.

3 A Scheme of the Trade as it is at present carried on between England and France,
by Patience Ward, Thomas Papillon and others, 1674, in Somers TracU (1748), iv.
p. 537*

* Anderson, Annals of Commerce, in. p. 131.
^ Paper and Paper-making Chronology, p. 20.

6 Reports Hist. MSS. Com., xiii., Pt. v., p. 436.

7 Ibid., p. 497. s Ibid., p. 496.

64 The White Paper Makers' Company [div. viii.

he had some knowledge of paper-making, since he was, at a later date, a
frequent petitioner for encouragements There were several suits for the
possession of the patent, which eventually remained in the hands of fl
William Sutton, who made paper at the King's Mills, Bjfleet^.

While matters were in this condition, John Briscoe had obtained
the assistance of some Frenchmen, who instructed him in the secrets of
the trade; and, on April 15th, 1685, he applied for a patent for
"making, sizeing and whitening writing, printing and other paper^""
Having obtained his grant, a company was formed, including John
Dunston, Nicholas Dupin, Adam de Cardonell, Henry Longueville and
a number of others. On June 13th, 1686, a petition was presented,
which stated that " a vast expense "" was necessary to carry on the manu-
facture to advantage. It was pleaded that a capital outlay of ^£^100,000
was required, " which sum, being so great, cannot be raised but by a
considerable number of persons, incorporated and joining in a joint-
stock."" It was also urged that, in spite of the patent, the company
" laboured under great inconveniences, met with insupportable difficulties
and ran great hazards '"" ; and, for these and other reasons, a charter of
incorporation was asked ^ Accordingly, a grant was signed on July 3rd,
1686, creating a "body politick" to be known as the Governor and
Company of the White Paper Makers in England with powers to elect
a governor, deputy-governor and assistants — the latter not to exceed
23 in number. The governor and deputy-governor were to be present
at all meetings for the making of orders. The shareholders were entitled
to one vote for each share held. This charter confers on the company
the sole right of making white writing and printing paper for the space
of fourteen years from July 3rd, 1686, and its officials were entitled to
break open doors of premises where they suspected paper, made in
contravention of the patent, was stored, and to call on constables to
assist them. The King promised to grant such further powers and
privileges as should be necessary for the carrying on and improvement
of the manufacture, and, in particular, to assent to any bill promoted by
the company ^ Recourse was soon made to the royal protection ; and,
on June 12th, 1687, the company petitioned that a fine of £500, imposed
on Theodore Janssen at its prosecution, should be granted to it*. The
same year a proclamation was issued " for establishing the manufacture
of white paper,"*' which was designed to assist the company in discovering

1 State Papers, Domestic, Petition Entry Book, xii. pp. 161, 451.

2 Reports Hist. MSS. Com., xiii., Pt. v., p. 436.

3 State Papers, Domestic, Petition Entry Book, lxxi. p. 127.

* Ibid., Petition Entry Book, lxxi. p. 268; Ibid., James II., iii. 97.
^ Ibid., James II., iii. 98 ; Ibid., H. O. Warrant Book, iv. p. 67.
« Ibid., Petition Entry Book, lxxi. p. 351.

Div. VIII. § 1] A Private Bill in Committee 1690 65

those who were copying its processes ^ Obviously there was an incon-
sistency between the privileges of this body and those previously granted
to Hagar and which had been exercised by Sutton. The legal position
of the latter was not strong, and the company succeeded in preventing
him from making white paper^.

On the signature of the patent, great energy was shown in developing
the business. The capital was divided into 400 shares which were taken
up, and c^50 per share was subscribed, making the whole sum paid (or
credited as paid) 6^20,000^ No less than five mills were leased or
purchased, and considerable quantities of paper made"*. On the
outbreak of war with France after the Revolution, the importation of
French paper was prohibited, and the company was in a position to take
advantage of the wide field open to its enterprize. It soon found that
more capital was needed, but there were doubts as to the validity of its
charter. The governor and assistants decided that the boldest course
was the most safe, and an appeal was made to Parliament for an act
confirming the charter and authorizing an increase of capital. There
was considerable opposition. William Sutton, the Dean and Chapter of
Windsor and " the ancient paper-makers of the kingdom " all petitioned
against the bill. On a conference between the parties, Sutton withdrew
his petition, on condition that four of the original shares should be
assigned him free of expense on the passing of the bill, and that further,
whether it passed or not, the company was to rent his paper-mill, paying
a fine of .£^100 and such rent as was fixed by arbitration ^

The bill was considered by a committee of the House of Lords on
May 15th, 17th and 19th, 1690. The Dean of Windsor contended that
the proposed legislation would lessen the value of the paper-mills belong-
ing to the chapter. The ancient paper-makers were supported by the
Mayor and aldermen of Chipping Wycombe. Counsel on their behalf
argued that the confirmation of the company's charter by Parliament
would be prejudicial to other paper-makers, "who could make good
white printing paper,'' and it was asserted that many of these would be
ruined, thereby becoming chargeable on the rates. The privileges asked
for by the company were described as " a plain monopoly," under cover
of which the whole supply of rags would be engrossed.

To these arguments, counsel for the company replied by showmg
that those opposing the bill were unable to produce fine white paper.

^ Paper and Paper-making Chronology, p. 20.

2 Reports Hist. MSS. Com., xiii., Pt. v.^ p. 436.

3 MS. Act to encourage the manufacture of White Paper, 2 Will, and Mary,
No. 25, House of Lords MSS.

* Reports Hist. MSS. Com., xui., Pt. v., p. 76.
6 Ibid., p. 436.

s. C. III. ^

66 The White Paper Makers' Company [div. viii. § 1

Attention was directed to the clause in the bill, which stated that the
confirmation of the monopoly of the company only applied to such paper
as was commonly sold at a price, exceeding 4*. per ream, and that the
chartered undertaking was precluded from manufacturing any that
realized that price or less. Thus the monopoly was confined to a
class of paper which was not made by the owners of mills who were
opposing the bill, and therefore nothing in it could take from them any
trade they had had previously. Further, the company offered to lay
open lists for further subscriptions of capital to any who chose to adven-
ture, while security would be given for the rent of the additional mills
which it was proposed to lease. This concession met the case of the
Dean of Windsor, and it was agreed that a clause should be inserted,
under which the company bound itself to take the mills belonging to the
chapter, if required to do so\

The argument was against the ancient paper-makers, and it was stated
that the opposition was aided by French agents. It is remarkable that
this statement was accepted by the Committee and was incorporated in
the preamble of the bill (which received the royal assent on May 20th),
where it is said the members of the company had "at great charges
purchased and erected diverse mills, with great hazards of their persons
and estates, the said attempt being highly opposed by agents of the
French King'^."" The act also sets out that, in spite of these and other
hindrances, the manufacture had been set up and great quantities of
paper were produced. In order to encourage the undertaking, so that
the demand for white paper should be supplied from home manufacture,
it is enacted that the charter should be confirmed for a period of fourteen
years to be computed from the end of the session. Further, " for the
better carrying on and improving the said manufacture and to the intent
that the stock may be so increased as to establish the same in all parts
of the kingdom and that all and every their Majesties' subjects, who shall
be desirous to become members of the said company, may have liberty to
do so,'' it is provided that the original capital of d£^20,000 was to be
increased by a new subscription, the books for which were to lie open in
Abchurch Lane and in some other public place till September 20th, 1690,
" when any person may subscribe as many shares as he pleases at £60
each " — that is at the par value. This clause is of considerable interest
as possibly the earliest case of parliamentary control of the capitalization
of a company. The act proceeds by prohibiting the export of rags,
under pain of forfeiture, and it also ratifies the agreement reached for

1 Imports Hist. MSS. Com., xin., Pt. v., pp. 74-6.

2 There is evidence of such intrigues in the case of the Royal Lustring company^
vide infra, p. 74.

Div. vm. § 1] Gh^eat Advance in Price of Shares 1692-4 67

the protection of other paper-makers by forbidding the company to
make paper, usually sold at 4,9. per ream or less^

There is no evidence to show whether the subscription of additional
capital in 1690 was large or not. The earliest quotation of the shares
was on March 30th, 1692, when the price was 60, or a premium of
20 per cent. This was followed by a relapse until 41 was touched on
May 5th. A recovery then set in and 49 was quoted at the end of June.
There is no record of the movements of prices for the remainder of the
year, but in January 1693 the shares stood from QB to 67. Up to the end
of April they were over 70. Towards the close of May there was a fall
to 69 which was continued till 59 was recorded on July 19th. From this
date there was a steady advance — 70 being quoted on September 13th,
80 on the 28th, and 90 on October 11th, while on December 29th the
price was 94. At this time the company seems to have been doing a
large business. Sales were frequently advertized as to be held at its
house in Queen St.'^, while Houghton describes it " as a great manufac-
ture^.'' Even the person of quality, who wrote the jeremiad which he
entitled Anglice Tiitamen, is forced to confess that, though the perfection
of the finer French papers had not been wholly attained, the English
makers " had then come pretty near it ""' and their work had " wonderfully
improved.'"* The rag-pickers, all over the country, were kept busy in
supplying the raw material, and the industry, as a whole, was described
as being in a flourishing condition ^

These favourable estimates of the future of the company are reflected
in the quotations of its shares, during the early part of the year 1694.
Up to January 17th the price remained at 94. From the 24th (when it
was 97) it steadily advanced. The rapidity of the rise is shown by the
following summary of fluctuations, during the ensuing three months :

1694 (week ending Friday) February 2nd, 9th

« „ „ 16th

„ „ „ 23rd, March 2iid .

98
. 105
. 120

„ „ March 9th, 16th, 23rd

. 150

„ month of April

. 140

For some reason, Houghton ceases to print quotations of these shares
after April 1694. It is probable that there was a considerable reaction
in the price. In 1696 the Commissioners of Trade reported that the

1 MS. Act to encourage the manufacture of White Paper, 2 Will, and Mary,
No. 25, House of Lords MSS.

2 London Gazette, No. 2959, March 19, 1694 ; No. 3000, Aug. 9, 1694 ; No. 3053,
Feb. 11, 1695 ; No. 3129, Nov. 4, 1695.

3 Collection for Improvement of Husbandry and Trade, by John Houghton, No. 103,
July 20, 1694.

* Pubhshed 1695, p. 25.

5—2

68 The White Paper Makers' Company [biv. vm. § 1

company " was not in so thriving condition as it might have been,"'"' and
they attributed its dechne to the evils of stock-jobbing management.
Just at this time a number of companies, founded during the recent
boom, had come to grief in the subsequent crisis, and the charge of
stock-jobbing became the facile explanation of the failure — ;just as the
diagnosis of " a fever,'' by the medical practitioners of the period, covered
a multitude of disorders ^

At this time the paper-making industry was experiencing the effects
of the prevailing depression, and a further adverse influence arose out of
the financial necessities of the government. The House of Commons
decided early in 1697 to impose a duty of 20 per cent, ad valorem on
all paper made in England and one of 25 per cent, on that imported.
The company joined with the other manufacturers in petitioning against
the former tax which was intended to last for two years and which was to
be levied on vellum, parchment and pasteboard. The line of argument
adopted, against the imposition of the tax on home-made paper, was the
contention that great injury would be done to the trade, while the pro-
duce of the tax, if consumption remained the same as in the previous
year, would be only ,£'^17,600. The whole amount of paper, used in
England, was estimated to be worth d£^68,000, of which ,^£'40,000 was
imported. There were 100 mills making coarse papers with an average
annual production of £9^00 each, or ,^20,000 in all. The company had
eight mills the output of which was valued at ^8 ,000 2. In spite of
this protest, the duties were imposed by the act 8 and 9 Will. III. c. 7^.

It is probable that the paper-makers had considerably underestimated
their output. • This was certainly the case with the company, since
according to a report of the Commissioners of Trade dated December 23rd,
1697, that is after the duties had been imposed for six months, its annual
production was 100,000 reams of white paper. Now, under its act, the
company was forbidden to make paper, which sold at ^s. per ream or less,
therefore, instead of its annual production being only £SfiOO a year, it
must have been at least ^20,000 and may have been worth double that
sum. This report assigns, as causes of recent hindrances to the progress
of the trade, the charge of stock-jobbing and also that there had been a
scarcity of white rags*. The fact, that the supply of rags was deficient,
is indirect evidence that the production of all kinds of paper was con-
siderably greater than it was stated to have been in the petition of the

1 Journals of the House of Commons, xi. p. 595.

2 The Case of the Paper-Traders, Humbly offer d to the Honourable House of Commons

[P1697], Brit. Mus. '-^ — . The proposed duties at the specified rates would

amount to £16,600. The remaining £2,000 arose from the tax on parchment, &c.

3 Statutes, VII. p. 190. * Journals of the House of Commons, xii. p. 435.

Div. vm. § 1] Consequences of Taxes on Paper 1697-9 69

manufacturers, while the complete absence of any quotations of the shares
for more than three and a half years shows that there can have been no
active speculation in that period. At the same time, there is independent
testimony that the industry soon became depressed and it was described
as being " almost quite sunk under the weight of the present tax^" The
company appears to have been particularly affected by the check to the
demand, which followed the rise in prices, and it is recorded that many
mills were compelled to abandon the making of white paper and to con-
fine themselves to the production of the commoner and cheaper varieties 2.
Such a change would have meant the winding up of the company, since
the act, it had obtained, precluded it from adopting this course, and it
is significant that when in 1699, the duties of 1697 having expired, there
was a warm debate for and against the increase of the protection of
English-made paper, there is no mention of this company^. It was
eventually resolved by the House of Commons that the duty on home-
made paper should remain at 20 per cent, while that on foreign was to
be increased to 30 per cent.^ On the bill being sent to the Lords, an
amendment was inserted by the latter House resulting in considerable
friction. Neither side would recede from the position it had taken up,
and the bill did not become law\ Therefore the paper-makers lost the
protection of 10 per cent., in addition to that afforded them by " the
book of rates.*" There is no evidence to show at what time the company
retired from business. The English paper-making trade, on the whole,
progressed. About 1710 there were 150 mills, producing 60,000 reams
annually^, while three years later all " the lower sorts," used in England,
were made at home, and it was estimated that the production of white
paper then amounted to between ^£30,000 and .£^40,000 a year^ On the

1 A Proposal for Building a Royal Library and establishing it by Act of Parliament
[by Richard Bentley], London, 1697 T Brit. Mus. '-^ — J.

, „ . ,^ 816. m. 12

2 Reasons for further additional Duties on Paper [? 1698-9], Bnt. Mus. — gg •

3 An Abstract or Short Account of the Duty laid upon Paper ; Reusom Humbly
offered., for laying a farther duty on all foreign paper ; Reasons humbly offer d... against
laying a farther duty upon Paper ; Reasons against further additional Duties on Paper
[Brit. Mus. 816 . m . 12, Nos. 40, 41, 42, 43] ; Journals of the House of Commons, xii.
p. 661.

* Journals of the House of Commons, xii. p. 648.

5 Ibid., p. 683 ; Journals of the House of Lords, xvi. pp. 461-3 ; The Manuscnpts
of the House of Lords, 1697-9, in. pp. 424-35.

6 The Case of the Merchants importing Genoa Paper. . .in relation to the Duty on Cardi

fr, .. A^ 816 . m . 121
Bnt. Mus. ~ J.

7 The British Merchant or Commerce Preservd, by Charles King, London, 1721, i.
p. 14.

70 The White Paper Makers' Company [div. viii. §

other hand it was contended, at this time, that the paper trade was one
which had suffered from the remission of the previous high import duties^

Summary of Capital and Prices of the Shares.

Capital.

Up to May 1690, 400 original shares of £50 each £20,000

A new siihscription was taken from June to September 20th, 1690.

Prices of

Shares.

Year

Date of highest price

Prices

Date of lowest price

1692

March 28

60—41

May 5

1693

December 27

94—69

July 19

1694

Feb. 28, March 7, 14, 21

150—94

Jan, 5, 10

^ Extracts from Several Mercators, being considerations on the State of British Trade,
1713 [Brit. Mus. 8246. b. 9], p. 7.

SECTION 11. OTHER COMPANIES FOR THE
MANUFACTURE OF PAPER.

The Irish Paper Company (1690).

The Governor and Company of the Royal Corporation
OF London for carrying on the Linen and Paper
Manufacture within the Islands op Jersey and
Guernsey (1691).

The Blue Paper Company (1691).

The Brown Paper Company (1692).

Col. John Perry and Partners (1709).

Besides the company of White Paper Makers and the Scots Paper
Manufacture^, there were several other paper companies. One of these
was also founded by Nicholas Dupin, and arose out of a patent granted
to him in 1690 for the manufacture of white paper in Ireland for 14 years 2.
On August 7th of the following year a warrant was issued to incorporate
a paper and linen company for Jersey and Guernsey, which was to have
a governor, deputy -governor and eighteen assistants. The qualification
for office consisted in the holding of shares, and seven members of the
court constituted a quorum. Power was also given to elect a sub-committee
to manage the affairs of the company in the Channel Islands ^ In Aiiglice
Tutamen mention is made of a Brozmi Paper Compani/\ which probably
originated out of an invention by Thomas Neale and another for making
brown and coloured papers, '' without using coarse or fine rags or linen
cloth,"' out of a material of which store may be had in England and
Ireland ^

The most interesting of these minor paper companies was the one
that went by the name of the Blue Paper Company/. As in many similar

^ Vide infra, Division ix.. Section 6.

2 State Papers, Domestic, Signet Office, xii. p. 354 ; Patent Rolls (Four Courts,
Dublin), April 7, 3 Will and Mary.

3 State Papers, Domestic, H. O. Warrant Book, vi. p. 142. * p. 25.
^ State Papers, Domestic, Petition Entry Book, i. p. 400.

72 Irish, Brown and Blue Paper Cos. [div. viii. § 2

cases, where there was no charter of incorporation, the title is uncertain,
the company having arisen out of the sale of shares in the benefit of afl
patent, and the rights and responsibilities of membership were defined
by an agreement. The particular patent, on which this undertaking was
based, was one granted to William Bayly in November 1691 for printing
paper " with all sorts of figures and colours by several engines made of
brass, without paint or stain, which will be useful for hanging in rooms \"'''
An advertisement of the company gives a clearer idea of the nature of its
product, which is described " as Japan and Indian figured hangings and
another sort, consisting of large Japanese subjects and forest work also
imitation of wainscot^." The shares of this company were quoted in 1692
from 11 to 10 and in the following year from 12 to 9, while in 1694 the
price fell to, and remained at, 8. But despite the depression in the
stock-market, the business seems to have been flourishing. During the
year 1694 the accommodation at the company's office — the Blue Paper
Warehouse in Aldermanbury — was insufficient, and sales were conducted
at the ''large Japan Warehouse*" in Henrietta St., Covent Garden {i.e. the
premises of the " company for lacquering after the manner of Japan'''"),
while in addition a number of agencies were opened. Evidently the new
wall-paper had become popular, for imitations began to be put on the
market on a thinner paper and coloured " with a slight and superficial
paint*" ; and, besides wall-papers, in the same year " blue sugar loaf and
royal purple papers " were advertized for sale^. During the next ten years
similar advertisements were frequent, so that it may be concluded that
the business continued to flourish throughout the fourteen years for
which the original patent had been granted^.

In 1709 there was a partnership for the production of white paper
in Ireland under the management of Col. John Perry. In that year this
undertaking appears to have met with some success, since it petitioned
the House of Commons for legislation which would prevent the destruc-
tion of white rags which were required for the manufacture'^.

^ State Papers^ Domestic, H. O. Warrant Book, vi. p. 225.

^ Houghton, Collections, No. 114.

3 Vide infra, Section 9. ^ Houghton, Collections, No. 114.

^ London Gazette, No. 2956, Mar. 12, 1694.

6 E.g. London Gazette, No. 3117 ; Postman, July 8, 1703.

^ Petitions to the Irish House of Commons, Four Courts, Dubfin ; Petition of
Col. John Perry and Partners, June 2, 1709 ; The Journals of the House of Commons
of the Kingdom of Ireland (1796), ii. p. 206.

SECTION III. THE ROYAL LUSTRING COMPANY
OF ENGLAND (1688-1720).

During the controversy which raged in the reigns of Charles II.
and James II. over the commerce between England and France, much
attention was directed to the trade in silks. In 1674 the value of the
imports of these goods was estimated to have been =£^300,000^; while in
1686 the amount, recorded as having passed the Customs, was slightly
more, though it was calculated that so much was smuggled that the
total annual consumption could not have been less than ^500,000^. By
the later date a material known as alamodes, lustrings, lutestrings, lutes
or renforcez had become fashionable. It was "a fine, light, glossy, black
silk^,*" the peculiarity in the production of which consisted in the
secret of the "lustrating," i.e. in the imparting of the lustre or gloss.
A Frenchman, Pierre de Cloux, was acquainted with the art ; and, having
obtained the support of a number of persons who were prepared to
provide the requisite funds, a petition was presented on behalf of the
syndicate on November 28th, 1687, asking for a patent for the industry
as one new to England^. That the manufacture had not been hitherto
practised in the country seems to have been admitted at the time, though
later very circumstantial accounts were given of the early production of
considerable quantities of lustrings. The Weavers' company asserted that
in 1663 several pieces had been made^ In 1696 a number of persons
testified that between 1681 and 1686 they had seen many pieces that had
been made in Spitalfields, indeed one of these asserted that the English

1 A Scheme of the Trade at Present carried on between England and France (in
Somers' Tracts, iv. p. 536*).

2 Charles King, The British Merchant or Commerce Preservd, 1721, i. pp. 320, 328.

3 Murray's Dictionary— " Alamodes." It is interesting to notice that in 1622
Malynes mentioned "lutestrings" as a luxury, which he considered might reason-
ably be made a monopoly. Consuetudo, p. 213.

4 State Papers, Domestic, James II., Petition Entry Book, lxxi. p. 394.

^ The Weavers Answer to the Objections made by the Lustrings" Company (1696)

[BHt.Mu.. -«,»-«].

74 The Royal Lusti^ing Company [div. viii.

production at that time was 4,000 or 5,000 pieces a year>. These
statements can be shown to be false. The writer of a political
pamphlet wishing to find a metaphor which characterized arbitrary J
government, as a recent importation from abroad, speaks of it as
"this Allamode de France^.'''' Moreover, about 1683, Stephen Seignoret,
a silk merchant then living at Lyons, having consigned a consider-
able quantity of lustrings to London, which had been damaged on
the voyage, could not obtain a dresser in England who was able to
restore the gloss. It is highly significant of the jealousy with which
the weavers of Lyons guarded their trade-secrets, that the municipality
would only consent to a French dresser leaving for London to under-
take the work on condition that Seignoret himself should be kept in
custody till the man returned I Later in 1687 another French lustring
dresser, who had come to England, was paid £1B by the French
Ambassador to return home again, and, on his attempting to set out
for London, he was imprisoned, while in 1698 it was supposed he was
still in confinement.

It will thus be clear that, at the date of the petition of De Cloux, the
production of lustrings had not been regularly carried on in England.
At the same time there were difficulties to be surmounted before a
patent could be obtained. The law officers of the Crown reported in
favour of the petitioners, in so far as the trade they proposed to start
was new, but they recommended that reference should be made to the
Commissioners of Customs to ascertain whether the revenue would suffer
by the lustring industry being established'*. The result of this enquiry
was not unfavourable to the hopes of De Cloux and his supporters.
On March 9th, 1688, a warrant for a patent was made out, though
the grant itself was not sealed till November 23rd. This document
conferred on a number of persons named in it, together with any
others they might subsequently assume as partners, the sole right
of exercising the invention of making, dressing and "lustrating" those
silks, known as plain black a la modes, renforcez and lustrings, subject
to the following conditions. The patent extended only to such black
silks, of the species described, as were used for scarves and hoods, the
work was to be carried on under the inspection of the Weavers' company

1 The Manuscripts of the Hotise of Lords, 1695-7^, ii. p. 139.

2 The Growth of Popery and Arbitrary Government, by Philo Veritas, Cologne,
1682, p. 161.

3 The Report of the Committee of the House of Commons to whom the Petition of the

Royal Lustring Company of England was referred, London, 1698 Brit. Mus. j

— ' L reprinted in Journals of the House of Commons, xii. p. 213. J

* State Papers, Domestic, Petition Entry Book, lxxi. p. 402. ■

Div. VIII. § 3] The Patent and Issue of Shares 1688-92 75

of London, and monthly accounts were to be furnished by the members
both of pieces made and of the looms employed \

The patent establishing the undertaking was completed just when
the country was in the throes of the Revolution, and it was unfortunate
that De Cloux, who was the only person possessing the requisite techni-
cal knowledge, happened to be a Roman Catholic and left England in
the train of James II. The company, which was in process of forma-
tion, was thus brought to a standstill through want of expert advice;
but, as the French refugees began to arrive in increasing numbers, it
became possible to obtain a certain amount of suitable labour, and two
looms were started and kept at work. On the prohibition of commerce
with France, arising out of the declaration of war against that country,
the patentees were not slow to recognize that a wide field had been
opened up for their enterprize. Towards the end of 1691 or in the first
months of 1692, sustained efforts were made to greatly extend the
operations of the company. The financing of the undertaking was
arranged by a Mr Gervaise who fixed the capital at ,£*60,000, divided
into 2,400 shares of ^25 each 2. The earliest transaction recorded was
on April 14th, 1692, when the price realized was 32. In May the
assistants decided that sales should be made to the public at 30, and
many purchases were arranged at this price during the remainder of
the year. In the accounts of the company the capital was always
regarded as being ^£^60,000 and therefore it may be inferred that, out of
the issue price of d£*30, £6 consisted of a reimbursement to the owners
of the patent of their outlay together with promoters' profits, while the
remaining ^25 per share was used in carrying on the business. On
May 14th, 1692, a petition was presented which stated that lustrings
were being produced and asking that, since there were now 134 persons
interested in the patent, a charter of incorporation should be granted to
them^ The Solicitor-General reported on May 30th that great per-
fection had been attained in this manufacture, and he recommended
that the company should be incorporated*. On July 28th a warrant
was issued for the preparation of a charter ^ Some delay arose from
the intervention of the Weavers' company, but at a full court of this
body, held on October 10th, a clause was read, which it was proposed
should be included in the grant, and which stated that this document

1 State Papers^ Domestic, H. O. Warrant Book, iv, p. 400; Journals of the House

of Commons, xii. p. 221 ; The Case of the Weavers who are Petitioners to be relieved

-, r^ . ,. 816 . m . 13"!
against a Clause in the Coale Act [1695] Brit. Mus. zrz^ .

2 Journals of the House of Commons, xii. p. 221.

3 State Papers, Domestic, Petition Entry Book, i. p. 292. * Ibid., p. 307.
5 Ibid., H. O. Warrant Book, vi. p. 383.

76 The Royal Lustring Company [div. viii.

was to be interpreted as cqntaining nothing prejudicial to the Weavers'
company, whereupon it was agreed that all opposition should be with-
drawn \ When at length the charter was sealed, it incorporated those
interested in the patent of James II. as the Royal Lustring Company of
England with the usual powers, which however were to be subject to all
the conditions embodied in the grant of 1688. The government of the
company was committed to a governor, deputy -governor and twelve
assistants. The minimum qualification for a vote was the ownership of
10 shares, and no holding entitled the proprietor to more than a single
vote^ In addition to the royal charter, there came encouragement
frpm Parliament, since it was enacted that, after March 25th, 1693, no
foreign lustrings might be imported except under licensed

The company received influential support. The Stephen Seignoret,
already mentioned, purchased 382 shares*. A "Lustring House" was
opened at Austin Friars, where large sales of alamodes were made from
time to time for many years ^ Office-hours, except before and after
sales, were from 8 till 12 o'clock, and from 2 to 6 o'clock daily, except
Sundays and holidays^. Business proved good, and at one sale alone,
in October 1693, the lustrings, auctioned by "inch of candle," realized
cj^l4,000 '. The company was able to increase the number of looms, but
it was not long before friction arose with the English silk weavers.
At first, as was indeed necessary, French artisans had been employed.
These worked at a cheaper rate than had previously obtained in London.
As the English apprentices had begun to acquire skill, pressure was put
on the governor and assistants to discharge their foreign hands. The
company was accused "of taking bread out of the mouths of the native
weavers," and the men themselves were not slow to take forcible means
of persuading the governing body. They followed the assistants to
their homes in a riotous manner, making threats and breaking windows ^
Compulsion in the same direction was exerted by the powers of
inspection granted to the Weavers' company; and, eventually, the
governor had to give way and many of the French workmen were dis-
missed. This action had a double result which manifested itself in the
future. On the one hand, the piece-work wages were higher, though in
all probability not to the extent recorded by Charles King, who gives
the English rate in this trade as more than double the French^. On

1 Court Books of the Weavers' Company (1692-4), xii., Oct. 10, 1692.

2 The Charter of the Royal Lustrmg Company [Brit. Mus. 8223. e. 69].

3 4 Will, and Mary, c. 5, § 5, Statutes, vi. p. 384.
* Journals of the House of Commons, xii. p. 222.

s London Gazette, No. 2855, Mar. 30, 1693. « /jie?., Feb. 11, 1696.

7 Houghton, Collections, No. 65, Oct. 27, 1693.

8 Treasury Papers, cxxxix. 19 ; Calendar, 1708-14, p. 327.
^ Charles King, The British Merchant, i. p. 8.

Div. VIII. § 3] Position of the Industry 1692-B 77

the other side, it is to be feared that the change was accompanied by
a deterioration in the quality of the product; for if, as was frequently
stated, the secret of "lustrating" silks was unknown to English weavers
up till 1690, it would necessarily take a considerable period for the art
to be thoroughly mastered by them.

It needed time for these disadvantageous elements in the organization
of the company to manifest themselves, and in 1694, 1695 and 1696 it
enjoyed great prosperity. Houghton spoke of this trade in 1694 as
one which England had "wanted much," and he considered that the
Royal Lustring company was likely to outdo all the others that had
been recently established ^ Even the pessimistic writer of the tract,
AngUw Tutamen, finds himself compelled to admit that this under-
taking was thriving, and he believed it would continue to do so, "whilst
it kept stock-jobbers from breaking in upon itl"' Publicity was given
to the quarterly sales, and from time to time paragraphs appeared in the
press, which were designed to draw attention to the enterprize, as for
instance when it was recorded in 1695 that the King had been pleased
to assure the company of his protection, that he had lately granted
further encouragement, to which the practical note was added that the
assistants were willing to employ weavers free of the Weavers' company^.
By the act 6 and 7 Will. III. c. 18 it was provided that lustrings,
imported under license, must be sealed at the Custom House, those
produced at home were to be sealed by the Lustring company. Any of
these fabrics, found without either of these seals, were subject to for-
feiture, and the goods seized according to this section might, after being
condenmed at the Custom House, be purchased solely for exportation.
In 1696 a bill was promoted in the interests of the Weavers'* company,
giving that body equal rights in the sealing of lustrings made in
England, but the measure did not become law^. This legislation was
important, not only in aiding in suppressing smuggling, but also in
giving the Lustring company some supervision over the Weavers'
company, so that both organizations met on more equal terms.

In another respect too the company had strengthened its position.
The Duke of Savoy, like the rest of the allies, had prohibited the
entrance of French goods into his territories. The people, however,
were in want of cloth; and, unless the prohibition was relaxed with
regard to this commodity, they must obtain it from England. Since
the Lustring company brought silk in large quantities from Piedmont,

1 Collections, No. 103, July 20, 1694.

2 p. 30. It is significant too that Defoe {Essay upon Projects, 1697, p. 13) does
not mention this company as one of the failures through stock-jobbing.

3 Houghton, Collections, No. 169, Oct. 25, 1695.

^ The Manuscripts of the House of Lords, 1695-7, ii. p. 138.

78 The Royal Liistrmg Company [div. vni. §

it was suggested that it should export cloth there; and accordingly \i
1696 an experimental shipment valued at ,£*1,500 was made^

Testimony to the progress, already made by the company and to its
future prospects, is borne by the quotations of the shares. From the
issue-price of 30 there had been a fall till 20 was touched at the end of
1694. From that date, contrary to the general course of industrial
securities, the shares rose till 33 (for cash) or 38 (in bank-notes) was
recorded in 1696. Such a price, in view of the prevailing depression
during the crisis, shows that the company was considered to be doing
well.

It is possible to some extent to reconstruct the state of its finances
in 1696. It had, at that time, 670 looms at work in London and 98 at
Ipswich, making a total of 768, which gave employment to about 6,000
persons 2. A loom was capable of making 10 to 12 pieces of lustrings
in the year, each of which contained on an average 4 lbs. of silk and con-
sisted of some 60 ells in lengths Since the total demand of England for
lustrings, while this trade with France was open, was estimated at 10,000
pieces annually, it will be seen that the company had brought its capacity
up to a point which approximated to the amount required just before the
Revolution. Whatever might have happened in the future, as yet the
maximum output was not being produced. It was said by the Weavers'
company, which at that time was hostile to the Lustring company, that
the latter during the first four years of its existence had only made
9,000 pieces ^ Doubtless this is an underestimate, but, if any reliance
can be placed on it, the output in 1696 is unlikely to have been 7,680
pieces. Taking the circumstances into account, it may be estimated
that the actual production in that year was 5,000 pieces. The prices at
which bidding started at the sales were from £19^ to £\Q per piece.
Taking the average of these, the output for the year may be valued at
:£^70,000. From this must be deducted the cost of production, which
consisted of two main elements. There was first the value of the
silk consumed. This was returned at a later date as 30*. per Ib.^ Since
a piece contained on an average 4 lbs. of silk, the cost of the raw
material came to £Q. The other important element of outlay was
the payment of labour, which was made on a piece-work basis. It is

1 Journals of the House of Commons, xn. p. 230.

2 Ibid.y XII. pp. 224, 225.

s Ibid., XII. pp. 219, 225, 226.

* The Weavers' Answer to the Objections made by the Lustrings Company Brit. Mus.
816. m. 13'

■]■

123

" Treasury Papers, cxxxix. 19 ; Calendar, 1708-14, p. 327.

Div. VIII. § 3] Manufacturing Profit 1695-6 79

recorded that the expense under this head came to \s. per elP; that is,
for the piece averaging 60 ells, to £Q. So that altogether the manu-
facturing costs came to £^ for the piece, leaving a profit of £6. It
may be noticed in passing that the wages appear unduly low in respect
to the numbers of persons employed. It is true that a loom could
earn <^30 to £^Q a year, but this was divisible amongst seven or eight
persons. Allowing that some of these were apprentices, the earnings
of the master-weavers would seem to have been small even for the time.
The explanation of the apparent anomaly is to be found in the fact
that one weaver frequently superintended the working of several looms.
Thus, as against 670 looms at London, there were only 229 master-
weavers, several of whom had charge of 16, 17, 18, and 19 looms each 2.
This phenomenon would apply also to the dyers and to some of the other
occupations, so that it becomes necessary to this extent to revise the
figures furnished by the company that 768 looms would maintain
6,000 hands. These results give the manufacturing profit on the basis
of an output of 5,000 pieces, which may be summarized as follows :

Manufacturing Profit of the Royal Lustring Company in 1695-6.

£ £

The estimated animal output of 5^000 pieces was valued

on an average at £14 per piece 70,000

5,000 pieces required 20,000 lbs. of silk at SOs. per lb. 80,000
5,000 pieces, containing on an average 60 ells, cost for

labour at I*', per ell 15,000 45,000

Balance being manufacturing profit = to nearly 35% on

the issue-price of the shares .. . ... 25,000

This statement is confirmed by the account given of the liquid
assets of the company at the end of 1696. It had finished goods on
hand worth <^30,000, its stock of raw silk was valued at =£^20,000^ In
all probability the debts, due to the company, exceeded those owed
by it. To this total was to be added that of buildings and looms.
Since Lewis Crommelin obtained between ^^30 and <^50 each for those,
used by him in making linen *, it is likely that the value of the 768 looms
may have been as much as =£^25,000, so that altogether it is clear that
the whole assets of the company were calculated to be worth con-
siderably more than the nominal capital, or even than the total sum
represented by the aggregate issue-price of the shares.

1 Charles King, The British Merchant, i. p. 8.

2 Journals of the House of Commons, xii. pp. 224, 225. It was, however, stated
by the governor in 1711 that the weavers, employed in 1695, numbered 507.
Treasury Papers, cxxxix. 19.

^ Journals of the House of Commons, xii. p. 210.

* Treasury Papers, lxxxiii. 104 ; Calendar, 1702-7, p. 96.

80 The Royal Lustrmg Company [div. viii. §

These results represent . the summit of prosperity attained by t
company during the early years of its history. Towards the end
1696 its trade began to fall off, and the next year witnessed a sudden
and dramatic change in its fortunes. In spite of the increased measure-
of protection, conferred by Parliament, which raised the valuation ofl
foreign lustrings, on which Customs were to be paid, from 40,y. per lb. to
80*. per lb. ^, and which was tantamount to prohibition, the sales of the
company continued to decline. By the summer of that year, although
the production had been diminished, the stock of lustrings had increased,
and over £50fi00 w^as locked up in it. It became increasingly difficult
to make sales, even at reduced prices; and, by the beginning of 1698,
the number of looms in operation had been reduced from 768 to 40
or 50 ^ No doubt the recent crisis would account foj a considerable
falling off in the demand, but it was apparent that the complete
explanation must be sought elsewhere. Under the monopoly of the
charter, the company was the sole producer of lustrings in England,
these fabrics could not be legally imported from France, while the duty,
recently imposed, should have protected it against the competition of
other foreign countries. The only solution was that there had been
a remarkable increase in the quantity smuggled. The agents of the
company began to feel the opposition of some powerful and secret
competition, which had created an organization immensely more skilful
than the sturdy "free-traders'"* of the coasts. For some time all efforts
to unmask this combination of adverse influences were fruitless. At
length a clue was found in the seizure of a passport, issued by the King
of France, granting safe-conduct to an English ship to load silks.
This document, which was dated July 7th, 1695, was enclosed in a
letter to a banker at Paris, signed by G and B^ which asked for a
renewal of the safe-conduct^. The problem then arose to discover the
identity of the persons, described by these initials. By April 1697
it was found that these were two partners. Frenchmen resident in
London, named John Goudet and David Barrau. A search-wan-ant
was obtained in June, and Goudef's books and papers were seized.
Most of the important letters were in cipher, but, as these were inter-
preted, evidence began to accumulate, which pointed to transactions of
more than commercial importance. The company was now in a position
to approach Parliament; and, on February 18th, 1698, its petition was,
considered and referred to a Committee ^

The investigation, which ensued, was a very thorough one, and the

* Statutes, ^'11. p. 401.

2 Journals of the Hov^e of Commons, xu. p. 210.

3 Ibid., xii. pp. 210, 223.

4 Ibid., XII. p. 118.

Div. VIII. § 3] Losses by Smuggled Silks 1696-7 81

report resulting from it, presented on April 16th, is a document of
extraordinary interest. It contains, in the bald official precis of the
evidence, the records of eye-witnesses of all those stirring episodes that
are now chiefly remembered as a part of the mechanism of the tale of
adventure. The escaping Jacobite stealing secretly on board the lugger,
sailing from Romney Marsh, where "there was not one in a hundred
but is concerned in the owling-trade'' which they would follow in spite
of all risks, "even if there were gallows erected at every quarter-mile
along the coast"': the system of passwords, ciphers and secret signals:
men passing under false names and disguises: the informer screwing up
his courage to risk his life for the sake of the reward — all these figures
constituted the dramatis personce of the enquiry. But behind and
beyond such picturesque episodes lies the greatest value of the report,
in so far as it reveals the prime movers, by whom the subordinates were
set in motion. Thus the complete organization of a highly developed
system of contraband trade is unmasked. Its ingenuity consisted in the
success with which the furtive character of the sale of goods, illicitly
imported, was overcome. As a general rule the danger, involved in the
marketing of commodities that had been smuggled, meant lower prices
with a consequent reduction in the profit which might otherwise have been
obtained. It was comparatively rare for large wholesale merchants to
deal in contraband goods, and it was by the adhesion of a number of
members of this class that it became possible to devise a comprehensive
scheme for the open sale in England of lustrings that had been made
at Lyons. Though Goudet was first detected, the leading personage,
amongst the infringers of the Customs laws, was Seignoret, who had
been an assistant of the Lustring company and who owned shares in it
as late as 1698. He was a man of great wealth, having by himself or
with the aid of his friends lent the government no less than ^^400,000.
In July 1697 he held as much as ^^1 05,000 in public securities ^ The
other participants in the scheme, though their fortunes were not so
great, were all men of considerable means and good credit, most of
whom were of French extraction, but carrying on business in London.
Seignoret was himself a native of Lyons, and he kept in touch with the
silk trade there. He knew that there was a great antagonism to the
Lustring company amongst the weavers of France, who had been
informed that "the patent could be broke by the expenditure of
100,000 crowns 2.'' It was firmly believed by the assistants that a
"public stock had been raised at Lyons to destroy the traded" Certainly
the French makers quoted very low prices to anyone who would take

1 Journals of the House of Commons, xii. p. 222. ^ Ihid., xii. p. 211.

2 Treasury Papers, cxxxix. 19 ; Calendar, 1708-14_, p. 327.

s. c. iir. "

82 The Royal Lustring Company [div. viii. § 3

the hazard of running their goods into England ^ The French mer-
chants in London, who joined with Seignoret and Goudet, formedM
themselves into a secret company and made calls on the members'.
Lustrings were run in the usual manner and were stored in concealed
receptacles in the lighthouses or other secure hiding-places, until they
could be safely removed^. The seals and debentures, used at the
Custom House, were copied with the most minute fidelity, and some of
the genuine ones of the Lustring company were obtained by fraud.
Nothing then remained but to fix these marks to the French goods,
when they could be sold openly. After this plan had been in operation
for some time, a further refinement was devised, by which the lustring^jB
made in Lyons, were conveyed to Rotterdam by Lisle and Antwerp'*.
On the arrival of the packages, the French seals were replaced by Dutch
ones, and the goods were shipped to England in the ordinary way.
This method was safer than the former one, though less profitable, but
the gain was increased when the silks were run in the usual manner and
brought to London, where they were again marked as having passed the
Customs. The contraband trade, that sprung up suddenly, assumed
vast proportions — a single cargo, that was successfully landed, was
valued at c^'7,000'^. A common shipment of lustrings was one worth
about half that amount^. Necessarily the loss of revenue was con-
siderable, while the Lustring company suffered greatly. But a more
serious aspect of the case was the element of treasonable correspondence
suggested by the discovery of a French safe-conduct, of the most ample
kind, for an English vessel, while the countries were at war. Necessarily
some consideration must have been given for a protection of this nature;
and, in the opinion of the House of Commons, information was sent
to France, disclosing particulars of the state of the country and of
naval and military preparations''. Since none of the original corre-
spondence was seized, there was no direct proof of this charge, but it
is significant that Goudet was sufficiently indiscreet to keep copies of
his letters to Baudran, a banker at Paris, which show that he and his
associates were working energetically against the conclusion of the treaty
which England was then negotiating with Savoy".

1 Journals of the House of Commons , xii. p. 213. '^ Ibid., xii. p. 214.

3 Ibid., XII. p. 213.

* Complaints were frequent that the Dutch gained, by being able to pursue a
direct trade with France, whereas Britain could only obtain French goods *^^at
second-hand," through the Dutch — Great Britain's Union, and the Security of the
Hanover Succession considered, 1705, in Somers' Tracts (1751), xv. p. 108 ; Some
Short Considerations concerning the State of the Nation, in State Tracts published duririg
the reign of William III., u. p. 323.

^ Journals of the House of Commons, xii. p. 212.

^ I.e. of 19 packets containing each 10 to 12 pieces. Ibid., xii. p. 217.

7 Ibid., xii. p. 272. » Ibid., xn. p. 218.

Biv. viii. § 3] A Smuggling Company detected 1698 83

The allegations of fraudulent importation had been fully established,
and it was decided to impeach Goudet, Barrau, Longueville, Seignoret,
Baudowin, Santini and Diharce as the chief offenders. A large number
of others, who were implicated as abettors of smuggling or as receivers
of the goods, were ordered to be prosecuted ^ As a result of the
impeachment, the persons accused were fined =£^19,500, of which ^£^10,000
was borne by Seignoret 2. It is significant of the acrimony with which
the dispute between the Old and the New East India companies was
being conducted that Shepherd — the promoter of the latter which was
at this time obtaining capital — told Seignoret that he might better his
case before Parliament if he subscribed^.

Necessarily the Report of the Commons' Committee represents the
purely English point of view, and, in order to ascertain whether it was
distorted by prejudice or feelings of national animosity against the
French, it is worth interrupting the main thread of the narrative to
enquire to what extent confirmation of the evidence at the Parliamentary
Enquiry can be obtained from information discoverable at Lyons. There
are several petitions of the silk-weavers there which show that, after the
prohibition of commerce by England, the industry was in a state of
very great depression. They complained, for instance, that many were
without work and were in great misery^ Their employers, being them-
selves without an outlet for their production, could only employ a few
hands ^ Application had frequently been made to the King, with a
view of obtaining some alleviation of this " profonde misere^" As early
as July 5th, 1695, a representation had been made that the exclusion of
French silks from England was so complete that some new method must
be devised to overcome the prohibition. It was then announced that
the manufacturers of Lyons had resolved, in concert with certain London
merchants, to purchase a small English vessel which it was intended to
load at Calais, and a passport for this ship was asked from the King,
with a view *'of concealing the design from the English and Dutch^''
Doubtless it was the passport, granted in response to this petition,
which was seized in England in 1697 and which constituted the clue to

^ Journals of the House of Commons j xii. p. 241.

2 Journals of the House of Lords, xvi. p. 340. The whole of this fine went to
Greenwich Hospital— Treasury Papers, cxxxix. 19.

3 The Manuscripts of the House of Lords, 1697-9, m. p. 231 ; vide supra, ii.
pp. 165, 166.

4 Recueil du Precis des Titres et Papiers de la Communaut^ des Marchands et
des Maitres fabriquants de la Ville de Lyon (this collection is also described briefly
as " Inventaire de la Grande Fabrique"), No. 43 Q.

^ Ibid., Nos. 4311, 43 T. « Ibid., No. 43 Q. . o •

7 La Grande Industrie sous le Be^e de Louis XIV., par Germain Martm, Pans,

1899, p. 254.

6—2

84 The Royal Lustring Company [div. vra. § 3

the discovery of the ingenious evasion of the prohibition, for which
as has been shown, Seignoret and his abettors had been fined.

It remained to reward those who had been instrumental in detectin,
the culprits. Hilary Ranue, who afterwards became governor of the
company, received an act of naturalization, grails'^. Payment was made
to the governor, on behalf of the shareholders, of :£'2,400 out of the
forfeitures of smuggled goods 2, and a continuance of this grant was
promised for the next six years. Yet another act was passed with the
double object of discouraging smuggling and of strengthening the
company. The charter was explicitly recognized by Parliament, and
the term of the monopoly was prolonged so as to cover the period for
the ensuing fourteen years from June 24th, 1698. The prohibition of
French lustrings was re-enacted, and the various previous regulations,
as to the licensing and sealing of those from other foreign countries,
were confirmed. To meet the disclosures made at the enquiry, some
further stipulations were added, as for instance that all lustrings from
abroad must be landed at London, that the penalty for the counter-
feiting of seals involved the pillory and a fine of ^500 for each offence'^.

The Lustring company, having succeeded in defeating the combi-
nation formed to wreck it, proceeded to make the most of its victory.
Publicity was given to the recent act in its favour, and energetic steps
were taken to co-operate with the Customs officials in the detection of
the smuggling of silks^ It was not long before this policy resulted in
some friction with the Weavers' company. Six pieces of black silks had
been seized as lustrings; and, at a full court, held on September 29th,
1701, the Weavers protested that these fabrics were not of such a nature
as to come within the scope of the act**.

As might be expected, the effect of the great contraband trade had
been to reduce the price of the shares, which fell from 83 in 1696 to 18
in 1697. This quotation was maintained during the parliamentary
investigation in 1698, but it is unfortunate that, after April 20th, the
Lustring company disappears from Houghton's list.

Altogether, apart from the loss by smuggling, the company suffered
from the crisis of 1696-7 in being unable to collect money due to it,
and a loan of ,£'22,000 had to be obtained^. A return towards pros-
perity is shown by the proceeds of the sale held on March 3rd, 1698,
when between ^£^10,000 and c^l 1,000 was realized. On this occasion,

1 Journals of the House of Commons, xii. p. 241.

2 Treasury Papers, lj. 51 ; Calendar, 1697-1701, p. 109.

3 9 Will. III., c. 43; Statutes, vii. pp. 426-8.
* London Gazette, No. 3463, Jan. 16, 1699.

^ Court Books of the Weavers' Company, xiii. f. 8.
^ Journals of the House of Commons, xn. p. 222.

Div. VIII. § 3] Condition of the Company 1698-1706 85

prices were considered good, 6s. per ell being obtained or ^18 per
pieced The absence of any record of the proceedings at meetings of
the company makes it impossible to determine its financial position in
1698, As its stock was realized and debts due to it collected, there
should have })een a considerable surplus. There are various indications
that point towards the conclusion that there was not a sufficient market
to employ all the looms that had been established in 1695. In accord-
ance with contemporary practice, if there were such surplus funds, not
required in the business, a dividend or division would have been made
to the shareholders, which would have consisted of a return of capital,
though not described as such. Had a division of this character been
made, it would have had an important bearing on any quotations of the
shares after 1700; since the price, then paid, would compare, not with
the original sum of ^30, but with that amount less the capital returned.
Though it would appear that the company was in a position to make
a distribution of the kind indicated, there is one important consideration
which has to be taken into account. The weavers, employed by the
company, stated that they had been supported at the expense of their
employers during "the calamitous times," when only a few looms were
at work and when they would otherwise have starved ''. Such outlay
may have consumed a large sum, which, under other conditions, would
have been divisible amongst the shareholders, and it may have been
that it was not found possible to make any large distribution.

It was not long before it was seen that the repressive measures of
1698 had not been effective in suppressing the smuggling of lustrings
and silks. In 1703 the Weavers' and Lustring companies constituted
a joint-committee to promote further legislation I It was proposed
that an act should be obtained to compel the sealing, not only of
lustrings, but of all black silks, made in England. At a "Common
Hair' of the Weavers this scheme was rejected "as destructive to the
traded" Just about this time the Lustring company began to ex-
perience a new difficulty. On the renewal of the war between England
and France, the products of the latter country were again formally
prohibited. By an oversight in the drafting of the act, it was not
expressly stated that goods, seized as contravening it, must be sold only
for exportation. Hence French lustrings were being sold and worn in
England. These facts were set forth in a petition of the company to
the House of Commons, which was considered on January 15th, 1706^
and it was resolved that, since English lustrings equalled, if they did not

1 Journals of the House of Commons, xii. p. 210.

2 Treasury Papers, cxxx. 95 ; Calendar, 1708-14, p. 273.

3 Court Books of the Weavers' Company, xin. f. 16. '* Ibid., f. 17.
^ Journals of the House of Commons, xv. p. 236.

^ The Royal Lustring Company [div. vm

excel, those of French maniifacture, the company should be placed in as
fa,vourable a position as it occupied before the late act \ Accordingly,
a short measure w^s passed, giving effect to this resolution; and, in
particular, prohibiting the wearing of French lustrings in England^.
This legislation appears to have been effective for a short space; but,
on the Union with Scotland, a fresh and somewhat ingenious attack
was launched against the monopoly of the company. Under the Scottish
act of 1681", though lustrings should have been mentioned (as these
fabrips fell within the scope of the goods intended to be excluded from
the country) they were not enumerated''. The act of Union established
freedom of trade between England and Scotland, and therefore some
merchants imported French lustrings into Scotland before this act came
inito operation ; and, on its being put in force, they brought the goods
to England, as having been "lawfully imported into Scotland." When
the Lustring company effected a seizure, its legal advisers were met by
the following argument — "the commodities in question cannot be liable
to be exported, unless they be first forfeited; nor can they be forfeited,
unlesg they w^re illegally imported, which undoubtedly they were not^."
About the same time, it was afterwards alleged, the company had
covered the importation of silk by private traders, thereby obtaining for
the latter certain advantages in passing the Customs ^

By the year 1710-11 some indications are again obtainable of the
financial condition of the company. In 1706 the shares changed hands
at 15 J to 16^ In view of the possibility that considerable returns of
capital may have been made, the depreciation was perhaps more apparent
than real. It is true that Ranue, the governor, stated in 1711 that the
losses, up tQ that date, had been d£'40,000^; but, since he was agitating
to obtain payment of six years of the grant of ^2,400 (which had
only been received once by the company), it is probable this version of
the situation requires some modification. A truer view of the position
can be gained by piecing together a number of statements which give

1 Journals of the House of Commons, xv. p. 249.

2 Statutes, VIII. p. 549. ^ y^^g infra, Division ix.. Section 1.
* Acts of the Parliaments of Scotland, viii. pp. 348, 349.

^ Observations on the Acts made for the Encouragement of the Lustring Company,
which relate to the Exportation of French Alamodes and Lustrings ; humbly offered by
Walter Stewart and William Murray, Petitioners [.^1708]. Similar practices were
adopted in the case of wine and brandy— TAe Trade of Britain stated, being the
substance of two Papers published in London on occa^im of the Importation of Wine
and Brandy from North Britain [1708].

« Treasury Papers, cc. 32 ; Calendar, 1714-19, p. 235.

^ A General Treatise of Money and Exchanges, by Alexander Justice, London,
1707, p. 33.

® Treasury Papers, cxxxix. 19.

Div. vin. § 3] Manufacturing Profit 1710-11 87

the profit from manufacturing. There were 200 looms at wo^, the
output being 2,000 pieces annually. The cost of production remained
about the same as it may be estimated to have been in 1695-6, that is
M per piece. The price realized, however, was higher, being now as
much as ^16 per piece. In this way the following result is obtained:

Profit on Manufacture^ 1710-11.

2,000 pieces at £16 per piece £32,000

Cost of production at £9 per piece .., ... £18,000
Manufacturing profit £14,000

That the looms were fully employed appears highly probable from
the fact that the return of the purchases of raw silk from August 1st,
1710, to January 19th, 1712, happens to be in existence \ It amounted
to 10,207 lbs. for that period. This would give an annual consumption
of 7,500 lbs., which agrees fairly closely with that estimated inde-
pendently in the foregoing calculation which would have been 8,000 lbs.
Such a result, even after providing for the expenses of selling the goods,
for the payment of officials to detect smuggling, for bad debts and other
incidental outlay, ought to have left a balance sufficient to provide a
respectable return on the capital. While the actual present position of
the company in 1711 appears to have been satisfactory, the approaching
determination of its monopoly made the outlook uncertain. The
governor approached the government with a view to obtaining a pro-
longation of the special privileges. It was urged that the company could
employ 14,000 or 15,000 persons, "if it were suitably encouraged""; while
new shareholders were promised admission, on their buying an interest,
"at the intrinsic value of the stock 2." The weavers, working for the
company, also petitioned in favour of its continuance, asserting that, if
it were dissolved, they were faced with the prospect of starvation ^
When the treaty of peace with France was under negotiation, the
company found that, should it be ratified in the form proposed, French
lustrings would again be imported. It was believed by all the oppo-
nents of the clauses, relating to commerce, that the lustring trade would
not be able to survive the new competition*. Moreover, were this

1 Chancery Proceedings (1714-58), Bundle 2355, Triquett v. Royal Lustring Co.

2 Treasury Papers, cxxxix. 19. The reason for the latter offer is possibly as a
reply to the objection that the shares had not been sold freely of late. In this respect
the jointj-stock companies of the period were faced by a dilemma ; if sales were
numerous they were accused of stock-jobbing ; if few, of the stock being monopolized.

3 Ibid., Gx'xx. 95 ; Calendar, 1708-14, p. 273.

* TM Trade with France, Italy, Spain and Portugal considered: With some Obsen-u-
tions on the Treaty of Commerce betipeen Great Britain and France (Somers' Tracts, iv.
p. 555 ; Charles King, British Merchant, i. p. 8).

88 The Royal Lustring Company [div. vm. § 3

part of the measure rejected, it had to be recognized that the Weavers'*
company would oppose the renewal of the monopoly — indeed, on
June 29th, 1713, the former body expressed the intention of entering
on the making of lustrings, as soon as the privileges of the company
were determined, or came to an end by the effluxion of time\ Under
these circumstances the company decided to cease manufacturing; and,
in an advertisement dated October 3rd, 1713, it was announced that this
step had then been taken. After a final sale on the 15th, business was
to be discontinued'^. A general court was held on November 6th at
which a dividend was to be declared^; and, on December 17th, a further
meeting was summoned for special affairs^.

Although business, in the production of lustrings, was no longer
carried on, the company continued to exist as a corporation. Doubtless
there were numerous claims which required time to adjust. As late as
September 24th, 1716, a former servant of the company made charges
against the assistants, chiefly of small irregularities at the Custom
House ^ The investigation of these complaints, together with other
matters of detail, delayed the dissolution of the undertaking. There
were still some assets remaining at the end of 1719; and, when the
boom of 1720 began, steps were taken to make a fresh start or else
to dispose of the charter. There seem to have been negotiations with
one of the marine insurance undertakings before February, with a view
to the latter course. Eventually it was resolved to raise more capital
for manufacturing, and 10,000 shares were created. When a call of
^1 per share on each of these was announced, as payable on May 2nd,
those who were proprietors of the 2,400 old shares were informed that
at the same time warrants for a dividend of 8^. per share were payable
to them*. Subsequently there were reports of negotiations with the
Sun Fire Office'', and the Prince of Wales became interested in the
company®, with the result that the shares advanced rapidly. In the
summer they were said to have been paid up to the extent of £5 or
£5. 2^. 6d, and they touched 120^ The joint effect of having trafficked
in its charter and also abandoned the trade, for which it had been

1 Journals of the House of Commons, xvii. p. 444.

2 London Gazette, No. 5161, Oct. 3, 1713.

3 Ibid., No. 6167, Oct. 24, 1713. * Ihid., No. 5180, Dec. 8, 1713.
^ Treasury Papers, cc. 32 ; Calendar, 1714-19, p. 235.

* Post-Boy, April 14-16, 1720 ; Applehee's Journal, September 17, 1720, reprinted
in Daniel Defoe : his life and recently discovered writings, by W. Lee, 1869, ii. p. 279.

"^ Vide infra. Division xi. , Section 2 c.

8 "The Prince and Princess descended to desire subscriptions in all ye bubbles.
Copper, Lustring and I know not what and boasted of their gains," MS. ^' Second
and Last Advice to ye Freeholders of England," 1721.

* Anderson, Annuls of Commerce, in. p. 339.

Div. vin. § 3] The Position from 1713 to 1720

incorporated, for at least six years, caused the Lustring company to be
one of those against which the celebrated writ of scire facias was issued
in August 1720^ With the declaration of the invalidity of its charter
in respect to its proceedings at this time, its title disappears finally.

Summary of Capital and Prices of the Shares.

Capital.
£60,000, divided into 2,400 shares of £26 each, issued at £30.

Prices of Shares.

Year

Date of highest price

Prices

Date of lowest price

1692

April 14, 21

32—30

May, June

1693

Jan. to June

30—27

Sept. 13, 20, 27

1694

Jan. 4, 10, 17

29—20

Dec. 5-26

1695

Oct. 4, Dec. 11 to end of

30—20

Jan. 2, 9, 23, Feb., March,

year

April and May till 23rd

1696

Feb. 5, 12

332—25

Dec.

1697

Jan. to June

25—18

Aug. 28 to Dec.

1698

Till April

1706

16—15^

1 Cf. Part I., Chapter xxi.

2 Or 38 if purchased by bank-notes.

SECTION IV. THE GOVERNOR AND ASSISTANTS
OF THE KING'S AND QUEEN'S CORPORATION
FOR THE LINEN MANUFACTURE IN ENGLAND
(1690).

Though linen had been produced at an early period in England,
all the finer qualities were imported until the Restoration. In 1669
some French weavers, settled at Ipswich, had made linens which sold
at 15^. per elP. As yet, however, the industry had not taken firm
root, and a patent was granted to Charles Howard, encouraging him to
manufacture fine linens^. Many years elapsed before he set to work.
After the removal of the prohibition of the importation of French
manufactures in 1685, there was a great demand for the products of
that country. This was especially so in the case of fine linens. The
quantity entered in the books of the Custom House in 1686 was valued
at ci^398,611, and the average of the next three years is said to have
been as much as c^700,000*'. The arrival of the Huguenots supplied
the technical skill that had hitherto been lacking, and it was clear that
there appeared to be an opportunity for a man of enterprize, who could
command capital and was able to secure competent workers. Eustace
Burnaby — who claimed to have an invention for white paper-making —
came forward, and, on February 11th, 1687, he petitioned for a patent
"for working and weaving superfine white thread and fine linen, commonly
called bag-hoUands, diapers, damasks... and all other sorts which had not
hitherto been made in England^."

After the Revolution Nicholas Dupin, in association with Henry
Million and a number of others, undertook to introduce the French
method of bleaching and manufacturing fine white linen, and on May
27th, 1690, they obtained incorporation as the Governor and Assistants
of the King's and Qiceens Corporation for the Linen Manufacture in
England. The charter recites that the founders of the enterprize had

1 The Happy Future State of England, 1688 [Brit. Mus. 699 . k . 18], p. 267.

2 MS. Rawl. A. 336, f. 40.

3 The British Merchant or Commerce Preserifd, by Charles King, 1721, i. p. 319,

* State Papers, Domestic, Petition Entry Book, lxxi. p. 317. With reference to
Burnaby's connection vvith the paper trade, vide supra, p. 63.

Div. vm. § 4] Floatation of the Corporation 1690 91

at their own charges, both in foreign parts and at home, found out
several profitable arts and mysteries, such as the art of preparing flax
and hemp for making and weaving all sorts of cambrics, lawns, diapers,
damasks, bag-hollands and other sorts of cloth, and the making of looms,
heckles and other engines, not hitherto used in this kingdom, which are
necessary for preparing the threads and weaving, working and bleaching
the said manufactures. To encourage the corporation the sole privilege
of exercising these inventions was granted to it. The governing body
was to consist of a governor, deputy -governor and 15 or more assistants.
The two former officials were "to be chosen out of the assistants and
the latter out of the freemen of the company"" by plurality of votes.
One vote was allowed for each share or " charge a member had in the
joint-stock ^"'''

The undertaking was divided into 340 shares, and these were sub-
scribed by the members and their friends at d^lO each^ It would seem
that ^3,400 should have been available as capital, but this was not so,
since there was some outlay of the nature of preliminary expenses. Just
at the time that Dupin and his associates were applying for a charter,
Howard had begun "to set up the linen manufacture in the north""
under the patent he had obtained. According to his own account, he
was approached by the two " mystery-men '"—Dupin and Million — with
a view to his taking shares in the proposed corporation. Howard,
" altogether disliking "*"* the idea, refused to join the projected company,
whereupon Dupin offered him 20 shares, "acknowledged to be worth
^5200,'' if he would appear before the Attorney-General to support the
petition for the charter. On this basis the opposition was withdrawn,
and the grant of incorporation was sealed^. No doubt, as in other cases,
the promoters of the company received some consideration, either in the
form of shares, issued to them without payment, or else out of the funds
subscribed by the public. It follows that the corporation started business
with very small resources, in spite of which energetic steps were taken to
initiate manufacturing. Workhouses and warehouses were built*, while

1 State Papers^ Domestic, Signet Office^ xii. p. 355 ; Ibid., Patent Roll, No. 3337 ;
Proposals of the Gov" and Ass^^ of the Kings and Queen's Corporation for the Linen

Manufacture in England Brit. Mus. ' ' .

2 Proposals, ut supra ; MS. Rawl. A. 336, f. 40.

3 Statement of Charles Howard of his part in carrying on the Linen Company
with Nich. Dupin and Hen. Million, 1691, April 18 ; MS. Rawl. A. 336, f. 40.
According to this account of Howard's, he refused to transfer his patent to the
corporation, but it is recorded, in a petition of the governor and assistants (State
Papers, Domestic, Will, and Mary, Petition Entry Book, i. p. 146), that a former
patent had been purchased.

* State Papers, Domestic, Will, and Mary, Petition Entry Book, i. p. 146.

92 The English Linen Corporation [div. vin. §'

Howard provided flax tools, engines, mills and looms, besides super-
intending the sorting and spinning, also presenting the corporation with
" his conveniency, friends and interest in the norths" The progress of
the work and its prospects soon began to attract attention, and Narcissus
Luttrell, writing on December 18th, 1690, says that " the new Linen
corporation is much increased^." Such "increase"" related partly to the
output of linens, partly also to the formation of an Irish linen company,
on terms which were believed to be exceedingly beneficial to the English
organization. Dupin was sufficiently astute to see that both Scotland
and Ireland possessed considerable advantages for the linen industry,
and he took steps to establish companies in each country. There is
some doubt as to the original form of the scheme with regard to the
relation of the three undertakings to each other. Inasmuch as they
were finally organized as associated companies, with the English corpora-
tion in the most important position, and since the governing body of the
latter accused Dupin of "many unfaire practises'*'' at the inception of
the Irish venture, it may be inferred that the intention of the inventor
in 1690 was that the companies in each country should be mutually
distinct and independent. The position at the end of the year was
that the Scottish project had been temporarily withdrawn owing to the
opposition of the Royal Burghs*, but that a charter had been signed on
December 13th, 1690, for an Irish linen corporation, constituted in a
similar manner to the body already established in England. The latter
took the view that Dupin, besides being its deputy-governor, was bound
by his agreements with it to supervise the process of manufacture accord-
ing to his own secrets, and that therefore he could not fairly act in
a similar capacity to another, and a rival company. The difficulty was
overcome, for the time being, by an arrangement which was designed to
protect the interests of the English corporation. Dupin, as promoter
of the Irish undertaking, was to receive 100 shares of ^^5 each without
being required to pay calls on them. On December 29th, 1690, the
governor and assistants of the English company required that these
vendor shares should be handed over by Dupin to them to be divided
pro rata amongst the adventurers. This claim rested on the fact that
Dupin was an official of the company and therefore the fruits of his
work, in developing the linen trade, belonged to the corporation. The
surrender of the vendor shares was agreed to by Dupin on April 4th,
1691, subject to the qualification that he should be required to transfer
only 85 of these, as he had already parted with 15 to " two gentlemen

1 MS. Rawl. A. 336, f. 40.

2 A Brief Historical Relation of State Affairs, ii. p. 147.

3 Add. MS. (Brit. Mus.) 28877, f 109.
* Vide infra, Division ix.. Section 4 c.

Div. VIII. §4] Bonus in Shares of the Irish Co. 1691 93

who had designed to take out a linen patent for Ireland." The scrip-
bonus, procured by this arrangement, was very valuable. Each
member of the English corporation, who held four shares, became
entitled to one share of the Irish company. These latter at one time
sold at from ^"^40 to ^50, so that, at that price, the bonus was one
valued at about 100 per cent.^ Moreover a number of provisions were
made which affected the output of the Irish corporation. The English
organization was to act as its agent, receiving a commission for factorage
and storage 2. It was alleged that the effect of these agreements was
that the Irish company could only sell its linens in England, and that
through the English corporation l A further agreement was made on
the basis of certain proposals of Dupin's, the latter being dated April
10th, 1691. These related chiefly to the devising of means by which the
control of the Irish corporation should be divided equally between the
English company and persons resident in Ireland who subscribed for
shares in the former. Under this scheme the English body undertook
to pay for one-half of any shares issued, while the Irish undertaking
agreed to allot the moiety of such shares to the nominees of the English
corporation''.

The benefit of this scrip-bonus, together with "the expectation
of great profit," caused the shares to rise to a great premium ^ "The
actions," in the words of a contemporary writer, " mounted apace," and
the corporation, finding that it required further capital to carry on its
operations in England and to take up its quota of the shares of the
Irish company, offered to receive a new subscription at £50 per share ^.
A considerable amount of this issue had been taken up by April 1691 ^
and the funds, so obtained, were employed in increasing the output
of the company. Public sales were held by inch of candle at the " Old
African House." At the third of these, on November 22nd, 1692,
10,000 pieces were offered, divided into 600 lots, consisting of a consider-
able quantity of white linen ("none having ever before been so well

1 Vide infra, p. 100. It is not clear whether this scrip-dividend was distributed
before or after the issue of further shares at 50. It seems probable that the latter
was the course adopted ; if this was so, the value of the bonus per share would
necessarily be less.

2 Minutes of proceedings respecting articles to be inserted in the Charter of the
Linen Corporation for Ireland, with the agreement thereto of the projectors, Dupiu
and Million, 1690-1 ; MS. Rawl. A. 336, flF. 44-6.

3 The Linen and Woolen Manufactory Discoursed, with the Nature of Companies
and Trade in general, London, 1691, pp. 11, 12 (Advocates' Library).

4 Proposals made by Nicholas Dupin to the Linen Co., April 10th, 1691 ; MS.
Rawl. A. 336, f. 42.

6 AnglicB Tutamen, 1695, p. 24. ^ Proposals, itt supra.

'^ In MS. Rawl. A. 336, f. 42, in the course of a statement dated April 10, 1691,
there is a reference to the "second subscribers."

94 The English Linen Corporation [biv. vni. § 4

whitened in this kingdom ""), many " locrums '' and " dowlas " and other
white and brown linens. Purchasers, paying cash, were to receive 5 per
cent, discount, those settling within a month 4 per cent. ^

Beneath this appearance of great prosperity, the corporation was
exposed to a number of difficulties and dangers. In 1691 there was
a quarrel between Dupin and Howard. The former had asked Howard
to communicate his method of preparing flax, as the court had required
that the secrets of manufacture should be explained to two of the
assistants. This request was refused, and Howard complained that, after
the ensuing quarrel, his life was " furiously sought."' He also alleged
that Dupin and Million had confessed to him that they had no new
inventions and that they feared they would be discovered to be " grand
cheats." The other side of the tale represents Howard's conduct in a
less favourable light. Dupin accused him of betraying the interests
of the corporation, more especially in having endeavoured " to debauch
them [i.e. Dupin and Million] from the service of the corporation to
serve his own estate in the norths" The blame seems to rest with Howard,
since fine linen was produced after he had retired from the company, and
Dupin remained faithful to it all through its career.

Only a few months afterwards friction arose with the Irish company
which had bound itself to allot one-half of any shares issued to the
English undertaking. On the floatation of the former, application was
duly made by the court of the latter, and the specified deposit was
tendered. But the governing body of the Irish company repudiated the
agreement, declaring it "void and unreasonable." The English corpora-
tion wrote a letter of remonstrance on September 18th, 1691, pointing
out that if it became necessary to appeal "to the rigour of the law
against the violators of the contract," " such a breach is like to happen
as will turne to the damage, if not the utter ruin of the manufacture in
Ireland 3."

Further, the jealousy of the woollen industry had to be faced. It
was alleged that the linen trade was "a despicable one," and that it
required so much labour that it would withdraw workers from cloth-
making. Gloomy pictures were drawn of the danger of the decay of the
English staple trade through this cause, with a consequent reduction in
agricultural rents. In 1691 a bitter attack was made on the corporation
on these and other grounds. It was said that the formation of a com-

1 London Gazette, No. 2810, Oct. 13-17, 1692.

2 Statement of Charles Howard of his part in carrying on the Linen Co. with
Nich. Dupin and Henry Million ; MS. Rawl. A. 336, f. 42.

3 Letter of the King's and Queen's Corporation for the Linen Manufacture in
England to the Governor of the King's and Queen's Corporation for the Linen
Manufacture in Ireland; Add. MS. (Brit. Mus.) 28877, f. 109.

Div. vm. § 4] Position and Prospects 1691-4 95

pany was not a proper way to set up and increase manufactures. The
very name of an incorporation was described as " a spell to drive away...
all tnen of industry,'' especially those with a capital of <^500 or less.
"Traders,'' the writer continues, "are like armies in the field, small
parties, tho' numerous, give way to a united forced"

The court soon found itself in want of capital. Not only were large
sums required to purchase flax and pay wages, but also operations were
being prosecuted vigorously in Scotland, although as yet no legal
authorization had been obtained there. As early as June 1691 the
governor petitioned the Crown for the privilege of raising wrecks off the
south coast of England, " so that the linen industry should not sink for
want of support during its minority 2" — a homoeopathic remedy of up-
holding a sinking industry by the raising of foundered ships !

The quotation of the shares in the spring and summer of 1692 shows
that the combination of friction within and attacks from without had
resulted in a fall from the high price reached in 1691. During the
earlier part of April they were over 40 and, for a fortnight, as high as
42. Till June 10th there was a gradual relapse, 29 being touched on
that day^, after which there was a recovery, and 38 was recorded on
June 24th. During the remainder of the year the shares continued to
advance, and in January 1693 they stood at 45. Thereafter the quota-
tion was not below 40 until May. The development of the industry in
Scotland was believed to be promising, and by this time Dupin had
matured very ambitious plans for its further growth*. During the
remainder of the year the price fell steadily until it was only 18 in
December. This represented a premium of 80 per cent, on the original
issue-price, and, in comparison with the high level reached in 1691, the
quotation two years later suffered from the former being inflated by the
share-bonus of that time. In 1694 there was some improvement and,
for the months of February and April, the price stood at 22, relapsing
however to 12 in June. At this time Houghton thought well of the
prospects of the corporation "which," he wrote, "had caused many
thousands of c^s to be spent in this country." It was expected that,
with proper methods, its business would much increased In spite of
this favourable verdict, the fall continued till 8 was touched at the end
of September. It is most significant that this great depreciation in the
price of the shares was contemporaneous with the progress of the
formation and floatation of the Scottish company in the fonii that
this scheme had assumed in 1694. The shareholders in the English

^ The Linen and Woolen Manufactory Discoursed, ut supra, pp. 5-9.

2 State Papers, Domestic, Will, and Mary, Petition Entry Book, i. p. 146.

3 It is possible this quotation may be a misprint, in which case the lowest price
would be 30, recorded on May 12.

* Vide infra, Division ix., Section 4 c. ^ Collections, No. 99, June 24, 1694:

96 The Eiiglish Linen Corporation [div. vin. § 4

undertaking had bound themselves to subscribe one-half of the capital
required for the Scottish enterprize up to dfi'l 5,000. Had this sum been
demanded, it would have proved a crushing burden, involving the pro-
vision of a larger capital for a subsidiary company than the parent one,
in all probability, had been able to obtain. Indeed, had the proposed
stock in the Scottish corporation been fully subscribed, it would have
had at its command much larger resources than the English organization.
This aspect of the scheme was interpreted as evidence that Dupin and
the other prominent members of the company were less, hopeful than
they had been a few years earlier, and the shares remained between £1
and £H until the summer of 1697 when they fell to £b.

At the end of 1695 the prospects of the corporation were not con-
sidered promising. The author of AnglicB Tutamen says that " by
degrees the reputation of this mighty manufacture sunk here and, I
understand, is in a bad condition and will hardly hold up its head,
much less advance any further \" About the same time the writer of
an Essay upon Projects instances the linen company as one the shares of
which were almost unsaleable, and which was likely to "come to
nothing^.'" In a Report of the " Commissioners appointed to look
after the trade of England," dated November 25th, 1696, it was stated
that the condition of the company " was not so thriving as it might have
been^."*' These different statements display a striking unanimity in
attributing the decline in the position of the corporation to stock-
jobbing. " All of a sudden," it is said, " some mean spirits fell to
stock-jobbing and scared the easy and timorous and brought the
actions down, and abundance sold off their shares, contented with
their first profits, which were considerable, rather than attend the
hazard of making greater in a little time, or losing some of the
present*." It is obvious however that sales of shares by timid
members would not be sufficient in itself to injure the credit of the
company permanently, and, as a matter of fact, even when the shares
were below par, a very extensive business was being done. Thus in
1696 a single payment of .£'500 was ordered by the court to a merchant
at Darlington for linen bought by the corporation ''.

The steadiness of the market in the shares during 1695 and 1696
shows that, though the great expectations, formed soon after the founda-
tion of the company, had not been realized, it was carrying on a moderate
business. Two new factors were now coming into operation which
affected its fortunes very adversely. From 1696 the government had

^ p. 24. 2 p 13^ s Journals of the House of Commons, xi. p. 595.

* AnglicB Tutamen, p. 24.

^ I am indebted to Miss Maud Sellars for copies of three bills of exchange, dated
28 Feb., 26 June, 17 October, which she discovered at Darlington. These relate to
transactions of this company, the amounts being £300, £500, £600.

Biv. VIII. § 4] Manufacturing abandoned 1698

decided to encourage the Irish linen industry, and such action would
tend to weaken the position of the EngHsh corporation. Moreover, after
the peace of 1697, French hnens could be imported, and it is clear that
the company was unable to compete with the fine fabrics which were
now coming into the country. In 1698 it is recorded that, while the
corporation was still subsisting, it had no longer any looms at work, but
contented itself with selling linens purchased from the weavers in Durham,
Lancashire and Yorkshire ^ It follows that the undertaking had ceased
to be a manufacturing enterprize, and that it had become a mere dis-
tributing agency. Thus there was no justification for its special
privileges, nor indeed was any benefit now obtainable from them,
since these all related to the making of fine linens, which had been
abandoned. It is significant too that, in a statement drawn up by
Dupin about this time in which he urges the advantages of this in-
dustry, he does not propose that the measures, he recommends for its
encouragement, should be exercised through the corporation'^.

There is no further mention of the business of the company after 1698.
It is to be expected that, though it may have struggled on for a few years,
it was soon compelled to wind up its affairs. In 1720, however, when
application had been made for a patent for the production of linen,
some of those who had been shareholders in this corporation appeared
before the Attorney -General in order to oppose the proposed grant, but
they were unable to show that the company had continued to exists

Summary of Capital and Prices of the Shares.

Capital.

In 1690, 340 shares were issued at £10 each £3,400

In 1691 a further issue of shares was made at £50 each.

Prices of Shares.

Year

Date of highest price

Prices

Date of lowest price

1692
1693
1694
1695
1696
1697

April 6

Jan., Feb. 8, March 15
Feb. 7, April 11
Jan. to July 6

Jan. 6, March 30, April 28

42—29

45^-18

22—8

8—7

7-7
7-5

June 10
Dec. 20, 27
Sept. 26 to Dec.
July 6 to Dec.

Jan. 13, Sept. 1

1 Report from Commissioners for Trade in Journals of the Home of Commons,
XII. p. 435.

2 Proposals of Nicholas Dupin, First Deputy-Governor of the Linen and Wtnte-
writing Corporations in England, Scotland and Ireland [Brit. Mus. 8223.d.l7j.

3 Caledonian Mercury, July 25, 1720. . • *i,

4 Houghton gives a quotation of 103 on May 10, 1693, but, as the price m the
week before and after is only 39, it is probably a misprint.

S. C. III. '

SECTION V. TEXTILE INDUSTRIES IN IRELAND.

The Governor and Assistants op the King's and Queen's

Corporation for the Linen Manufacture in Ireland

(1691).
The Droghbda Linen Company (about 1691).
The Calico-printing Patent of John Pons and others

(1693).
The Flax and Hemp Company of Ireland (1696).
Linen Company founded by Louis Crommblin (1699-1700).
The Governor and Company of the Cambric Manufactory

at dundalk.

The manufacturing of linens, as distinguished from the spinning of
yarns, had not made much progress in Ireland by the middle of the
seventeenth century. In 1641 the export of yarns amounted to
2,921 cwt., valued at ^14,605 out of a total of .^393,811, and at
that time there was no record of any finished linens being shipped.
In 1665 the latter amounted to 522 pieces of 40 ells each worth
^•590, while the yarn came to 3,477 cwt., rated at .£^7,385^ The
Marquis of Ormonde made an effort to develope the trade by imJ
porting foreign workmen, but this scheme, like his proposed shipping
company and woollen enterprize, met with small success, owing to the
poverty of the country rendering it impossible to raise sufficient capital".
The first tendency towards an improvement however began to show
itself— by 1669 the export of linen had grown from £590 to ^1,044
and to ^6,000 in 1689^

The fact that so much yarn was exported, coupled with the presenci
of a supply of skilled labour after the Revolution, suggested t

ic^
hi

^ A Note on the Export Trade of Ireland in IGJ^ly 1665 and 1669, by R. Dunlop in
English Historical Review, xxii. p. 756.

2 Life of the Duke of Ormonde, by Thomas Carte, 1736, ii. pp. 341-3.

^ Eng. Hist. Rev., ut supra ; The Linen Trade, Ancient and Modem, by Alex. J.
Warden, London, 1864, p. 397 ; New Essays on Trade, by Sir Francis Brewster,
London, 1702, pp. 91-105.

Div. vm. § 5] The Irish Linen Corporation 1691 99

desirability of raising sufficient capital to utilize Irish yarn for the
production of linen. In 1690, there were at least three schemes
which aimed at effecting this object. Two of these — those of
Nicholas Dupin and an independent group of promoters — sought to
obtain a patent, while the remaining project was quietly matured, and
those supporting it did not attempt to procure any exclusive privilege,
but contented themselves with securing the necessary funds and making
arrangements for commencing work at Drogheda^ Meanwhile, as has
already been shown, the rival petitioners for a patent had come to
terms, by Dupin undertaking to hand over 15 shares to the other
group on their withdrawing in his favour I Accordingly, a warrant
was issued for the incorporation of the Govei'nor and Assistants of the
King's and Queens Corporation for the Linen Manufacture in Ireland on
December 13th, 1691. The English company, finding that Dupin was
to obtain 100 shares in the Irish undertaking, compelled him to hand
over the balance he had intended to retain for himself, after transferring
the 15 shares he had agreed to give the persons who had withdrawn their
petition for a patent in his favour. Further, after a considerable amount
of negotiation, agreements were made by both corporations, which gave
to the English body the right of subscribing for one-half of any shares
issued by the Irish undertaking and of exercising a certain amount of
control over its business ^

The Irish corporation was organized on the model of the body
already incorporated in England, and it was endued with similar
privileges. The scheme was taken up with considerable enthusiasm in
Ireland, and " many of the nobility and gentry were admitted, more for
their countenance and favour to the project than for any great help that
could be expected, either from their purses or their heads ^" The
difficulty of obtaining capital was such that it was decided to make the
shares of the denomination of £5 each. There were to be 1,000 of
these, so that, when all had been taken up, the nominal capital would
have been ^^5,000. There was a considerable amount of difficulty in
deciding the number of shares to be issued in the first instance. The
matter was debated at the court of the English corporation in April
1691. It was first proposed that the quantity of shares, offered for
subscription, should be the same as that at the inception of the English
company, namely 340. It was feared by some that, in view of the
circumstances of the case, the whole number offered might not be taken

1 Letter of Wm. Molyneux to John Locke, September 26, 1696 ; Locke, Works
(1727), III. p. 552. ,

2 Vide supra, p. 92.
3/6id,p. 93.

* Locke, Works, ut supra, iii. p. 552.

7—2

100 The Drogheda Linen Company [div. viii. § 5

up, and it was eventually agreed that the issue should consist of
300 shares ^ To these are to be added 100 shares assigned to Diipin,
so that the nominal capital at this date consisted of 400 shares, on
which it was proposed to call up £^ per share. This subscription,
which was taken in the spring of 1691, was characterized in a private
letter of the period as much too meagre to attain satisfactory results.
The industry was said to " go but slow, having but a small stock. It
was nonsense from the beginning to give away 400 shares out of 1,000
at iP5 a piece, who would put their money in such a stock^?"" With
many persons, the fact of the small issued capital, coupled with the
views that had been formed of the wide field that lay open for
exploitation, created an urgent demand for the shares. It is recorded
that " a great bustle was made about the business, many meetings were
held, and considerable sums advanced to forward the work, and the
members promised themselves prodigious gains, and this expectation
prevailed so far (by what artifices I cannot tell) as to raise the value of
each share to 40 or 50 pounds, though but five pounds was paid by eaxjh
member at first for every share he had^" Workmen were employed
and linen was being produced, when the corporation became involved in
two disputes, the one with the parent body in England, already
mentioned*, and the other with the company which had started manu-
facturing at Drogheda. The latter had been established on "more
equal terms " than had been obtainable in the case of the chartered
undertaking, and " it throve very well at first'." The corporation, on
hearing of this, took steps to enforce its monopoly, and eventually it
compelled its rival to amalgamate with it. Meanwhile, in September
1691 the dispute with the English body had come to a head ; and, as it
progressed, the shareholders became discouraged, while " the work began|H|
to flag and the price of the shares to lower mightily^." By the end of
1691, or early in 1692, there was little hope that the corporation could
be made a success, and it is probable that the attempt to manufacture
was abandoned not long afterwards.

For a few years there is no record of further developments in thi
Irish textile industries, except for the grant of a patent for 31 yea
to John Pons and his partners for a new invention of staining an
stamping calicoes, linens and other fabrics, which was dated July 3r(

* Proposals made by Nicholas Dupin to the Linen Co., April 10, 1691 ; MS.
Rawl. A. 336, f. 42.

2 Tobie Bonnell to James Bonnell, printed in Ulster Journal of ArchxRology^ ii,
p. 197.

3 Molyneux to Locke, Sept. 26, 1696 ; Locke, Works^ iii. p. 662.

* Vide aupra, p. 94.

^ Tobie Bonnell in Ulster Journal of Archceology , ii. p. 197.
^ Molyneux to Locke, ut supra.

Div. VIII. § 5] The Irish Flax and Hemp Co. 1696 101

1693\ In 1696, however, an ambitious scheme was under consideration,
which proposed the incorporation of a joint-stock body, under the title
of the Flax and Hemp Company of Ireland, the capital of which was to
be ^300,000'^. A contemporary critic of the Irish government wrote
that all its other measures were "but trifles in comparison with the
darling bill of the session, which was for the improvement of the Hempen

and Flaxen manufacture, and this after H n of T re\s project

for engrossing that trade into a few hands by a former bill was rejected
and exploded. This was such a coup d'etat as would have infallibly
ruined you at a stroke and have given the ministry a power of raising
the whole money of the nation whenever they pleased, under the specious
pretence of promoting a manufactured"

There is a conflict of evidence as to the state of the fine linen trade
in Ireland during the closing years of the seventeenth century. William
Molyneux wrote in 1696, " I have as good diaper, made by some of my
tenants nigh Armagh, as can come to a table and all other cloth for
household use''." Louis Crommelin, who was afterwards "overseer" of
this trade, stated that at this time the best linens produced in Ireland
only realized \9>d. to 15^. per yard'. With the declaration of the
House of Lords in 1698 (in which it was laid down as an axiom that the
wealth of England depended on the woollen trade, whence it followed
that this industry should be discouraged in Ireland) there came a change
in the situation. It has been said that such action was mainly political
— "Protestant linens were upheld and encouraged, whereas Popish
woollens were suppressed*." This dictum, however, assumes that the
woollen industry was almost wholly Roman Catholic, whereas there was
a considerable body of Protestants engaged in the trade, who petitioned
the Irish House of Commons as such''. Further, the production of linens
was not then, as it is now, localized in the north but was carried on in
the south and west also.

The advancement of the cloth trade had long been accepted as the
main feature of English commercial policy. This was the " heir," while
all other industries were younger brethren or foster-children ^ Therefore

1 Irish Patent Rolls, 6 Will, and Mary, No. 3.

2 Add. MS. (Brit. Mus.) 27382, f. 8.

3 A Short View of the Present State of Ireland written in 1700, by Dr Burridge [Lib.
Trin. Coll. Dub.], p. 7. * 1-ocke, Works, iii. p. 552.

6 Treasury Papers, x(!vii. 51 ; Calendar, 1702-7, pp. 411, 412.

6 The Linen Trade, Ancient and Modern, by Alex. J. Warden, 1864, p. 392.

7 State Papers, Four Courts, Dublin— Petitions to the House of Commons— CJase
of tbe Protestant Woollen Manufacturers, Oct. 12, 1690. This petition asked that
Papists should be " disabled " from working at the cloth trade.

8 Extracts from Several Mercatm-s, being considerations on the State of British Trade,
1713, p. 9.

102 Crommelin's Linen Company 1699-1700 [div. viii. § 5

it seemed natural to most of the statesmen of the period that "they,
like their fathers, should be very jealous'' of the establishment of rival
woollen manufactories. But, though Irish cloth-making was to be dis-
couraged, there was not to be an absolute loss to the country, since it
was to receive compensation in the development of the linen trade. The
arrangement made was in effect an anticipation of the commercial
clauses in the treaty of union with Scotland, and, in the language of the
latter, the linen industry was to be " the equivalent^ " to Ireland for the
check imposed on its making of woollens. From one point of view there
was an exchange of a certainty for a possibility, from another the scheme
aimed at " a territorial division of labour," in concentrating the labour
of Ireland on a trade for which the country possessed great natural
advantages. A further aspect of this equivalent was the assistance
which England gave towards the improvement of the linens, produced
in Ireland. This took the form of a bounty provided by England to
encourage expert producers, who would settle in the country and com-
municate their secrets to native apprentices. Many of these instructors
were Huguenots, one of the most prominent of whom was Louis
Crommelin. He settled near Lisburn, and others of his compatriots
established themselves at Waterford and elsewhere in the south. J
Crommelin was admitted to participate in the bounty on the following "
basis. It was calculated that the capital value of the machinery and
stock, he proposed to establish, was ^^1 0,000 — his looms being valued at J
d£^30 to £50 each. It was further provided that any additions to the t
plant should be valued on the same basis. Then, on the total so arrived
at, 8 per cent, interest was to be paid as if the capital had been lent to
the State, in addition to which ^380 a year was assigned to him to .
provide salaries for his assistants and for ministers ^ Crommelin ex«
pressed himself as being averse to trading companies — " I have always
observed," he wrote, " in France, Holland and Flanders that corporations
set up to regulate trade and commerce do more harm than good'."
Possibly this remark refers to a large and unwieldy body like the King's
and Queen's corporation, for Crommelin's own colony had many points
of contact with a joint-stock company. In the form in which th«
proposition was under consideration in 1700, the stock was to

* This term was in common use in the time of Charles II., vide The Anatomy oj
an Equivalent, reprinted in State Tracts being a Collection of Several Treatises Eelatii
to the Government privately printed in the Feign of Charles II., 1693, ii. p. 300.

2 Treasury Papers, lxxxiii. 104 ; Calendar, 1702-7, p. 96 ; Precedents and Abstract
from the Journals of the Trustees of the Linen and Hempen Manufactures of Ireland
the 25th of March 17S7, by James Corry, 1784 [Linen Hall Library, Belfast], p. 4.

* An Essay towards improving the Hempen and Flaxen Manufactures in the Kingdom
of Ireland, by Louis Crommelin, 1705, p. 24.

Div. VIII. § 5] CromnielMs Linen Company 1700-11 103

provided by Crommelin "and his friends i/' In some cases it appears
that the emigrants, who came with him, provided looms or other
property, and thus they ranked as shareholders in respect to the sub-
sidy of =£^800, paid by the English government. Further, since many
of them were also engaged in the actual process of manufacture, there
was a co-operative element in the management of the business. This
weaving industry was one of the most successful of those established
in Ireland by the Huguenots. Crommelin claimed in 1706, that the
quality of Irish linen had been so much improved that it realized 8*. to
9*. a yard, as compared with only l^d. or 15c?. before his enterprize had
been started. He mentions too that overtures had been made to him
to remove to Kilkenny, with a view of effecting a similar improvement in
the methods obtaining there I On the establishment of the trustees for
the linen manufacture, the bounty of <£'800 a year was transferred to
this body, as part of its revenue, and in 1711 Crommelin stated that his
share of it had been reduced to ^400 annually, which produced " not
3 per cent, interest instead of 8 per cent.^" He had already been
appointed " overseer of the Royal linen manufacture " with a salary of
<^200 a year, and in 1717 the trustees recommended that he should be
" encouraged,"' whereupon he was granted a pension of £4>00 a year*.
He died in 1727.

There was a considerable amount of opposition to the encourage-
ment of the linen industry. Archbishop King, writing in 1705 of one
of the many bills to aid this trade, says that " the clergy's party is most
shamefully invaded, and half their tythes given away without sense or
reason... sacrilege is an ill way of improving manufactures ^'' Swift, for
political reasons, became a bitter opponent of the linen industry and a
supporter of Irish woollen manufactures. Under cover of an allegory,
Ireland was compared to Arachne, condemned " to spin and weave for
ever out of her own bowels and in a very narrow compass ^^ In the
Story of an injured Lady similar charges are made in a somewhat
scurrilous form''. Swift himself was forced to admit (and indeed devotes
considerable ingenuity in endeavouring to explain away) the phenomenon
of a pronounced rise in rents through land being converted from tillage

^ Journals of the House of Commons, xiii. p. 299.

2 Treasury Papers, xcviii. 51 ; Calendar, 1702-7, pp. 411, 412.

3 Precedents and Abstracts, ut supra, p. 4. * Ibid., p. 23.

^ MS. Letters of Archbishop King, Library, Trinity College, Dublin (under
April 28, 1705).

8 A Proposal for the Universal Use of Irish Manufacture, written in 1720 in Swift,
Works (ed. 1762), iv. p. 24. A reply appeared, entitled An Answer to the Proposal
for the Universal Use of Irish Manufactures, Dublin, 1720.

"^ Works, IV. p. 255.

104 Irish Linen Trade 1700-26 [div. vm. § 5

to sheep farming ^ One cause, which may have aided this prosperity of
the grazing industry, was the prevalence of smugghng wool both to
France and Scotland I Meanwhile the linen trade was progressing
rapidly. It was said by Swift, though doubtless with some exaggeration,
that, by what he describes as " the detestable fraud of the merchants or
northern linen-weavers or both,*" trade to the value of <£*300,000 a
year in this commodity with Spain alone had been lost^ Further
evidence towards the progress of the industry is to be found in the
establishment of an undertaking described as the Governor arid Company
carrying on the Cambric Manufacture at Dundalk in the second quarter
of the eighteenth century ^ Such statistics as are available show that,
while there was a very slight decrease in the exports of wool and
woollen yarn as between 1697 and 1726, there had been an immense
increase in those of linens, as will be seen from the following sum-
mary^ :

1697 1726

Exports of linens and linen yarn £59,891 £342,295

„ wool and woollen yarn £117,155 £107,559

1 An Answer to a Paper called a Memorial of the Poor Inhabitants. ..of Ireland, 1728,
Works, IV. pp. 289, 291.

2 Thomas Knox to Secretary Southwell, Feb. 3, 1704, Southwell Papers, Four
Courts, Dublin.

3 A Letter to the Archbishop of Dublin concerning the Weavers, Works, xii. p. 209.
* Petitions to the Irish House of Commons, Four Courts, Dublin, Petition of

Dundalk Cambric Manufacture, Nov. 7, 1739. There are references to this enter-
prize in The Journals of the Royal Historical and Archceological Association of Ireland,
Third Series, i. pp. 7-20, Fourth Series, iv. pp. 139-41.

^ New Essays on Trade, by Sir Francis Brewster, London, 1702, pp. 102-3 ; An
Essay on the Trade and Improvement of Ireland, by Arthur Dobbs, Dublin, 1729,
pp. 18, 19.

SECTION VI. COMPANIES ENGAGED IN MANU-
FACTURES DEALING WITH METALS.

The Company interested in the Manufacture and In-
vention OP Milled-Lead (1670).

The Dipping Company (1691-2).

The Company formed to work the Patent of John
Stapleton for making brass for Ordnance (1691).

The Governor and Company for casting and making
Guns and Ordnance in Moulds op Metal (1693).

The Venetian Steel Company (? 1692).

It has already been shown that one of the early objections to the
East India and other distant trades, especially to tropical countries,
was "the spoil of shipping^" The timber of the ships suffered
from the ravages of certain marine organisms, and efforts were made to
lengthen the life of the vessels, by " paying the hulls from the water's
edge, downwards, with stuff and laying the inside of a sheath ing-board
(from inch and a quarter to three-quarters thick) all over with tarr
and hair, to be brought over the fore -mentioned stuff", and being well
nailed, graving or paying the outside of the said board all over with
another composition of brimstone, oil and other ingredients ^'^ The
objections to this method were the cost of the frequent renewals in-
volved and also the diminution in the speed of the ships that had been
sheathed in this manner. Not long after the first Dutch war in the
reign of Charles 11. , a new invention was discovered which, it was
thought, would be free from these inconveniences. For some time lead,
reduced by casting to a suitable degree of thinness, had been used for

1 Vide supra, ii. pp. 101-2.

2 A Deduction of the whole matter relating to the Lead-sheathing of his Majesty's Ships
in An Account of Several New Inventions and Improvements now necessary for England ;
The New Invention of Miir d-Lead for Sheathing of Ships against the Wm-m, better for
Sailing and cheaper above cent, per cent, than the old Way with Boards [by T. H.], London,
1G91, p. 36.

106 The Milled- Lead Company 1670-5 [div. vm. § 6

the roofs of buildings. Siich sheet-lead, owing to its inequalities,
would not be suitable for the sheathing of ships, but it was thought ^
that, if lead could be produced in sheets, all of the same thinness, the fl
problem would be solved. Instead of casting the lead, it was proposed
to roll it into sheets, and hence this process was termed " the milling of
lead " and that produced was called "■' milled -lead.'"* At this stage the
introduction of capital became necessary, and Sir Philip Howard and
Francis Watson, who were interested in the invention, sought for the
encouragement of Parliament, from which an act was obtained in 1670,
granting the promoters and their partners the sole use of the invention
for a period of twenty-five years \ In order to provide funds and to
determine the financial relations of the members of the company, the
undertaking was divided into twelve shares ^

Milled-lead was soon made, and the company was able to show
favourable estimates of the saving that could be effected by its adoption.
It was calculated that, taking the time the sheathing was likely to last,
and allowing for the value of the lead when it was removed, there would
be an economy of 150 per cent, as compared with wood I These figures,
together with specimens of the sheets, were submitted to Charles II.,
and by his directions the Phwnix was equipped with the new sheathing.
According to the account of the company, after three years' trial, the
timbers underneath the lead were examined with such satisfactory results
that the King ordered that the ships of the Navy " may for the time to
come be sheathed in no other manner than that of lead ^""

At this stage, when it appeared that a profitable business was open-
ing before the company, there was obstruction from persons interested
in the old method which was now in danger of being displaced, and it
was not till 1675 that a contract between the Admiralty and the
company was concluded ^ Though the opposition to the company's
invention had been temporarily suppressed, it was not ended. As the
ships, which had been sheathed with lead under the contract of 1675,
returned from service there were many complaints of the composition of
the rolled-lead, which was said " to be of a cancarous and corroding

^ An Act for granting unto Sir Philip Howard and Francis Watson j Esq., the sole Use
of a Manufacture, Art or Invention for the Benefit of Shipping, in Account of Several New
Inventions, p. 5.

2 The Humble Memorial of Sir Philip Howard and Company interested in the Manu-
facture and Invention of Milled-Lead [? 1683], in Account of Several New Inventions,
p. 68.

8 Ibid., p. 67.

■* Order from the Commissioners of the Admiralty December SO, 167S, in Accomd of
Several New Inventions, p. 7-

^ A Deduction of the whole Matter relating to the Lead-sheathing of his Majestx/s
Ships, in Account of Several New Inventions, pp. 8, 9.

Div. viii. § 6] The Milled-Lead Company 1678-95 107

nature and venemous to iron," destroying the rudder-posts and other
iron-work \ ITiere was an enquiry, as a result of which the company
undertook in 1678 to contract for the maintenance of rudder-irons in
lead-sheathed ships at rates not in excess of those paid up to this time^

When the controversy was in this state, there arose " some difference
between the partners themselves, which gave an interruption to their
proceedings^" ITie dispute occasioned a considerable delay, and the
company next shows signs of activity in 1686, when it proposed a new
basis of contract which provided for the sheathing of ships of the Navy
at a fixed sum per foot square, which rate it was claimed was half that
for wood-sheathing''. This proposal was not accepted, as appears from
the complaint made in 1690 that the use of milled-iead had been by
then discontinued in the Navy^ The loss of Admiralty contracts
discouraged the shareholders in the company. They had been at con-
siderable expense. According to one account, the mill, they had
erected, cost ^2,000^ They were without prospects of an immediate
return on their outlay and, about the time of the Revolution, they had
the opportunity of disposing of their property to two brothers, Thomas
and Charles Hale. The sale was carried through, and thus the milled-
lead undertaking is an interesting example of a reversion from manage-
ment by a company to that of a partnership.

The subsequent history of the undertaking may be briefly outlined.
The Hales began by endeavouring to press the sale of rolled-lead for
roofs of buildings as well as for cisterns, fountains, pipes and vessels for
brewers''. They succeeded in regaining the confidence of the Admiralty,
and about 1692 contracts for the sheathing of ships were again ob-
tained^. Once more opposition manifested itself. When the plumbers
found that the substitution of milled-lead for sheet-lead was affecting
them, they became " the mortal foes of the Hales." Complaints were
made to the Navy -Board, and this body asked for explanations from the
Hales ^ Further, on the determination of the monopoly in 1695,

1 Account of Several New Inventions, pp. 17-23, ^ Ibid., p. 24.

3 A Proposal of Mr Kent and Partners concerned in the Work of MiWd-Lead, in
Account of Several New Inventions, p. 65. ^ Ibid., p. 69.

^ An Advertisement to all who have Occasion to make use of Sheet-Lead [by C. Hale,
1690], in Account of Several New Inventions, p. 99.

0 State Papers, Domestic, Petition Entry Book, iii. p. 269.

7 An Advertisement to all who have Occasion to make use of Sheet-Lead, in Account of
Several New Inventions, ^. 99.

8 State Papers, Domestic, Petition Entry Book, in. p. 269.

» An Advertisement, shewing that all former objections against the Mill'd-Lead

sheathing have been answered by the Navy-Board themselves, Lend. 1696 Brit. Mus.

816 . m . 7
122

]■

108 The Dipping Company 1691 [div. vni,

another rolling-mill was erected, the proprietors of which entered on a
vigorous campaign of cutting of prices. They tendered to the Navy for
sheet-lead at Qs. per cwt. below the cost of production, with the avowed]
object of driving the Hales out of the trade, whereupon, according to
the tale of the latter, quotations would be advanced. The Hales asked
consideration from the Admiralty in view of the fact that up to
December 31st, 1701, they had saved the Navy £\0<i)00\ It would
appear that the older firm had not given satisfaction, since about this
time it had to adopt an apologetic attitude in reference to the sheathing
of the Rising Eagle ^ and between 1700 and 1702 the energies of the
proprietors were directed towards the popularizing of their lead for other
purposes 2.

Besides the milled-lead invention there were several other schemes
for new or improved manufactures in metals. In 1694 Houghton
mentions a Dipping Company which was founded on a patent.
The grant alluded to may have been that to John Stapleton on
November 28th, 1691, for making white and yellow metal, whereby
the expense of using gold and silver for gilding could be saved ^
The shares of the company, which acquired this patent, were quoted
at 17 in 1692, and are mentioned by Defoe in his list of those that
had been stock -jobbed to a very great premium, and which afterwards
became valueless, whereby many families were ruined^.

In 1691, on August 31st, Stapleton and Gustavus Adolphus van
Baudivin petitioned for a patent for a new method of mixing brass,
which would enable guns to be produced more cheaply than ever
before °. A warrant for a patent was granted on September 24th ^,
and it seems that this is the patent, owned by a company, associated
with the name of Stapleton, which however Houghton classes under the
heading of " saltpetre companies ''.'^ Inasmuch as there is the same diffi-
culty about a company in the same class promoted by Dockwra and
since there is no grant to either Stapleton or Dockwra for making salt-
petre, it may be inferred that these two companies were intended to

^ State Papers, Domestic, Petition Entry Book, iii. p. 269.

2 A Short Accompt of the first Motives and Reasons for the Miird-Lead Sheathing, its
Excellency, 1700 [Brit. Mus. T 100 (221)] ; A Second Advertisement, relating to Lead-
Sheathing upon the Rising Eagle, 1700 Brit. Mus. ' ' ; An Advertisement to

all that are concerned in the Use of Sheet Lead, demonstrating... that Cast-I^ead for
covering of Churches.. .is worse and... dearer than MiU'd-Lead, 1702 [Brit. Mus. TlOO*
(223)].

3 State Papers, Domestic, H. O. Warrant Book, vi. p. 229.
* Essay upon Projects, 1697, p. 13.

^ State Papers, Domestic, Petition Entry Book, i. p. 183.
« Ibid., H. O. Warrant Book, vi. p. 193.
'' Vide Plate, vol. i.

Div. VIII. § 6] Ordnance and Steel Companies 1691-3 109

produce ordnance, and the heading in Houghton's list was meant to
have been "Saltpetre and Gun Companies." Dockwra's company was
based on the invention of Thomas Puckle, to whom a warrant for a
patent was granted on March 17th, 1693, for the casting of great guns
in moulds of metals By August 11th, 1693, Puckle, Dockwra and
Richard Povey stated that, after great expense, the invention had been
brought " to perfection,'"* but that the undertaking was too considerable
to be carried on without a very great stock, and they therefore petitioned,
on August 11th, 1693, for incorporation as the Governor and Company
for the casting and making of Guns and Ordnance in Moulds of MetaP.
Either this or a later invention of Puckle's was one of the schemes of
the year 1720, when the £4t shares were quoted at £H^.

Thomas Neale did not confine himself to wreck-recovery projects*,
but also secured patents for several improvements in the working of
metals. In 1692 he and John Tyzack obtained the usual privileges for
the making of steel which was to be equal in quality to the best
Venetian steeP, and on June 6th of the following year he petitioned,
again in conjunction wdth Tyzack, for a patent for making screens with
iron-wire*. Like most of Neale's projects, the invention for steel-
making was transferred to a company, but, probably like the rest of
those promoted by him, it was a failure. In fact Neale is in all
likelihood the dishonest promoter, whose schemes are strongly con-
demned by Defoe and the writer of Anglice Tutamen.

There was another company, engaged in work connected with the
steel trade — the Sword Blade company — but as the making of swords
was only an incident in its history, the charter having been used to
cover three distinct businesses at different times, the account of this
enterprize may be dealt with more conveniently with others of a like
nature ^

* State Papers, Domestic, H. O. Warrant Book, vi. p. 520.

2 Ibid., Petition Entry Book, in. p. 5.

3 Anderson, Annals of Commerce, m. p. 341. * Vide supra, ii. p. 488.
^ State Papers, Domestic, Signet Office, xii. p. 601.

« Ibid., Petition Entry Book, ii. p. 337.

Vide infra J Division xii.. Section 3.

SECTION VII. GLASS - MAKING COMPANIES.

The Company of Glass-Makers of London (1691).
The Glass-Bottle Company (1694).

About the time of the Revolution the manufacturers of glass
complained that their trade had declined. This was alleged to be
due to dissensions amongst the owners of glass-houses and " to want
of good government"' in the industry^ Accordingly, on October 7th,
1691, a warrant was signed for the incorporation of a number of the
glass-makers about London and Southwark, as the Master^ Wardens^
Assistants and Company of the Glass-MaJcers in and about the Cities
of London and Westminster. This body, from its constitution, was
clearly intended to be a regulated company, though it is interesting
to notice that powers were given to raise a stock 2. About the same
time there was another organization of a similar character known as
the Company of Glass and Earthenware Sellers^.

The prohibition of trade with France gave a temporary stimulus to
the production of the finer grades of glass. Several patents were
sought to protect processes that were expected to make such kinds as
had been previously imported; and, when John Houghton began to
print his list of stocks and shares in 1692, he includes the price of
the securities of a glass company. This enterprize was promoted by
persons already interested in the glass trade, and amongst them was
Robert Hookes, who, with C. Dodsworth, had obtained a patent for
making improved window glass, red glass and plate glass in 1691 ^
Whether this patent was transferred to the joint-stock undertaking or
not, in a petition from the company dated February 2nd, 1693, its
objects are described in precisely similar terms ; and it was claimed that
sheets, both for windows and mirrors, had been made better, finer and

1 State Papers, Domestic, Petition Entry Book, i. p. 200.
'^ Ibid., H. O. Warrant Book, vi. pp. 197-9.

2 Reasons humbly offered by the Company of Glass and Earthenware Sellers, in
Answer to the Pot-Makers printed Reasons for their Bill, now depending in this

Honourable House, ?1698 Brit. Mus. '^' .

* State Papers, Domestic, Petition Entry Book, 11. p. 255 ; H. O. Warrant
Book, VI. p. 60.

Div. vm. § 7] The Company of Glass-Makers 1691 111

more lustrous than ever before or than could be accomplished in any other
part of Europe. The proprietors now numbered 120 and had raised
a capital of ^25,000. They asked to be incorporated as the Company
of Glass-Makers of London, but, as far as can be gathered, without
success \

In 1692 and 1693 there was a somewhat active market in the shares.
They are first quoted on IVIarch 30th at 28. A fortnight later the
price was 43; and, after a temporary relapse, this figure was again
reached on May 26th. During the remainder of the year the quotation
gave way, and on January 18th, 1693, they are recorded as being 34,
whence they fell, almost without a recovery, till April 11th, 1694, when
the price was 11. This is the last occasion on which they appear in
the list.

Very soon after the disappearance of the record of fluctuations in
the shares of the company of Glass-makers, those in the Glass-bottle
undertaking begin to be quoted. This enterprize was an attempt to
provide a satisfactory substitute for the " stone '' or earthenware bottles
in common use. Its objects may be gathered from the specification of
a patent obtained by Philip Dallows, one of the masters of the green
glass-works in 1689, and which may have been the concession this
company was formed to develope. The invention of Dallows, in
addition to providing a method for making "grenado shells'' of
glass, aimed at making bottles " sealed quarts or pints or any other
exact size 2/'

Though the shares of the company of Glass-makers had been
excluded from Houghton's list in April 1694, he had a good opinion
of its prospects. Writing in July of the same year, he states that the
Glass and Glass-bottle companies " had stock enough greatly to increase
trade ; by them," he continues, " our windows and looking glasses much
out-do what was done before by ourselves or neighbours I" The author
of Anglice Tutamen, on the other hand, instances the Glass-bottle
undertaking as one which was in danger " of coming to nothing through
falling into stock-jobbing ^" Certainly, the decline of the shares from
24 on August 15th, 1694, to 15 a week later might be taken to point
to some such conclusion, but it may have been that there were already
rumours of the adverse legislation which became a reality in the following
year. It was of a very burdensome character, imposing a war- tax of l.y.
per dozen on all bottles containing a quart, other than those of Hint
glass. Pints paid half the duty, and smaller sizes in proportion.
Window glass was rated at 10 per cent, ad valorem, flint glass and pkite

1 State Papers, Domestic, Petition Entry Book, i. p. 422.

2 H)i^ ^ Petition Entry Book, i. p. 57 ; H. O. Warrant Book, xvi. p. 160.

* p. 21.

112 The Glass-Bottle Company 1694 [div. viii. § 7

glass at 90 per cent., and air other kinds at 15 per cent. These taxes
were levied on the quantities made, not on what was sold^

The effect of this act was immediate and distressing. The glass-
makers, who produced the inferior kinds of glass, suffered most. Shares
in the Glass-bottle company fell from 15 to 7, while the manufacturers
stated that, in six months, since the tax had been levied, some had been
able to keep their works going eight weeks, others four weeks, some not
above two weeks ^ Houghton's reference to the companies, engaged
in the glass trade at this time, shows that their fortunes had changed
for the worse. "Whatever may be said,"" he writes, "against stock-
jobbing yet it has been the means to raise great sums of money to
improve this art, and seldom is so much money laid out in the kingdom
to encourage any trade but the public is the better — whatever the gain
or loss to the projectors may prove, caveat emptor^.''''

It was the contention of the manufacturers that the tax could not
be shifted to the consumer. Since similar duties were imposed on
imports, it would appear that the tax should not have been so burden-
some as was alleged by the glass-makers. The evidence of the workers
shows that there was a lack of employment, the great majority having
to subsist on poor-relief. Two causes may be assigned for the stagnation
in the industry. The duty was assessed on the goods made. In this
industry, where breakages were many, the tax for this cause, in some
cases, came to 100 per cent. Under such circumstances, where the
demand was elastic, it would follow that the consumption would be very
greatly reduced and that the manufacturer would have to bear the
greater part of the burden. There was, however, another reason con-
tributing to the difficulties of the trade. Some of the makers, finding
they could not sell their glass, " paid " it to their hands in satisfaction
of the wages due*. This was a short-sighted policy. The workmen
could not hold the stock they had been forced to acquire, and they
hawked it through the country, with the inevitable result of spoiling
the market. Thus it was said with some reason "that the glass-
makers were themselves chiefly the occasion of the stop of the
traded"

1 Statutes, VI. pp. 600, 601.

2 Journals of the House of Commons, xi. p. 639. The act came into force on
Sept. 29, 1695, the petition was received on March 30, 1696.

3 Collections, No. 181, Jan. 17, 1696.

* Journals of the House of Commons, xii. pp. 281, 282.

^ The Allegations of the Glass-Makers Examined and Answer'd Brit. Mus.

^^ — . In this account the total number of workmen in all the glass-houses

135 J

in England is given as 800. This seems to be an under-estimate.

Div. VIII. § 7] Glass Companies 1698-1705 113

After some experience of the impost it was found that the produce
of the tax was much less than had been expected, indeed the nett
amount paid into the Exchequer up to August 1698 amounted only
to dfi'l 3,500 \ More than this was due, but the manufacturers had been
unable to pay the money, and the Commissioners had been forced to
accept their bonds ^ Moreover, through many of the glass-works being
closed or working only a few weeks in the year, the consumption of coal
was lessened, and the Revenue lost the proportionate proceeds of the tax
on this commodity. For these reasons in 1698 half the duty on glass
was abated and the whole of that on stoneware, while in the following
year the remainder of the tax was remitted I

It was the makers of the cheaper kinds of glass who suffered most.
Whether the Glass-bottle company was able to survive till the duty was
repealed is doubtful. Its shares were last quoted, by Houghton, in 1696,
but their removal from the list is not decisive evidence that the under-
taking was wound up, since, at the end of that year, he greatly com-
pressed the space devoted to stocks, only retaining the names of those
ventures in the securities of which there was a wide and active market.
If, as seems possible, Dallows was one of the promoters and prominent
members of the company, it is significant that he appeared at the inquiry
as to the effects of the duty and that, while admitting that the trade in
bottles was reduced owing to the war, he expressed himself fairly well
satisfied with the position of the industry ^

The company of Glass-makers undoubtedly continued to exist until
after the removal of the tax. In February 1700 it was carrying on
business at the Old Glass-House in Foxhall, known as the Duke of
Buckingham's House, where it had several large mirrors for sale. It
is noteworthy that divisions in kind were made to the members, since it
was advertized that " several of the glass proprietors had not taken their
dividends of glass," which they were requested to remove at an early
date as the company's lease of the warehouse it was then occupying had
expired^ If the theory that this undertaking was based on a patent,
obtained about 1691, be well founded, it is not improbable that the
company survived until the term of that grant had expired in 1705.

1 Journals of the House of Commons, xii. p. 628.

2 Ihid., XII. p. 282.

3 9 and 10 WiU. III., c. 45 ; 10 and 11 Will. III., c. 18.

4 Journals of the House of Commons, xii. p. 282.

5 Postman, Feb. 13, 1700.

S. C, III.

Glass Companies 1692-6 [div. vm. § 7

Summary of Capital and Prices of the Shares.

Capital The Company of Glass-makers.
(1693) £25,000.

Prices of Shares.
The Company of Glass-makers, The Glass-bottle Company.

Year

Date of
highest price

Prices

Date of
lowest price

Date of
highest price

Prices

Date of
lowest price

1692

April 8,
May 26

43—28

Mar. 30

1693

Jan. 18

34—15

Nov. 15 to
Dec.

1694

Jan. 10

15—11

April 11

Aug. 15

24—15

Aug. 22 to
Dec.

1695

Jan. to
March 1

15-7

March 8
to Dec.

1696

7—7

SECTION VIII. VEGETABLE OIL COMPANIES.

The Annuitants and Sharers in the Beech Oil Company;
The Governor and Company for Making and Vending
Beech Oil (1714).

One of the directions in which invention showed itself after the
Revolution was in mechanisms for the extraction of vegetable oils. Thus
in 1696 George Capstack presented a petition for a patent "for his
engine or mill, with iron and wooden rollers, for making oil from all
manner of seeds, in less time and greater quantity, with more advantage
and less labour than any now in use^." In 1708 a somewhat similar
claim was advanced by Robert Pease of Hull, who undertook to extract
oil from native materials chiefly ^ Then on June 6th, 1713, Aaron Hill
declared that he could obtain " a sweet, pure and wholesome oil from a
certain vegetable of Great Britain ^'^ The "certain vegetable" of this
petition was the seed of the beech-tree, whence HilFs project was
generally described as " the beech-oil invention."" A patent was
granted to Hill on the 13th of October following, and he adopted
an ingenious method of raising capital to develope his scheme. On
January 5th, 1714, books were opened at the Oil-Annuity Office,
against the upper end of Montague Street in Great Russell Street, to
receive subscriptions from those who were prepared to support the
venture. Persons, who paid in ^^20,000 at the Oil Office, were to
receive annuities of no less than 50 per cent, for the ensuing 14 years^
On the 21st of the same month the whole amount had been taken up',
but it was not long before some of the annuitants began to repent of
their bargain, since they did not see any preparations being made to
earn an income, from which the sums promised to them could be paid.
Whereupon Hill offered to return the money subscribed by those who

1 State Papers, Domestic, Petition Entry Book, in. p. 155.

2 Ihid., VII. p. 379. ^ I^i<^-> xiii. p. 119.

* An Impartial Account of the Nature, Benefit, and Design of a New Discovery and
Undertaking to make a pure, sweet and wholesome oil from the fruit of the Beech Tree, by
Aaron Hill, 1714 [Brit. Miis. 1029. d. 26].

5 The Insurance Cyclopcedia, by Cornelius Walford, London, 1871, i. p. HO.

8—2

116 The Beech Oil Company 1714-15 [div. viii. § 8

were dissatisfied, and annuitants who had paid in £bfiOO withdrew,
leaving £\5fi00 as the total at this date\

According to HilFs account, it was impossible to start the under-
taking until the next autumn. In order to provide the first half-yearly
payment to the annuitants, a new development was announced on
March 1st, 1714. This took the form of establishing a company to
which the patent was to be assigned. The capital was divided into
5,000 shares which were to be issued at five guineas each, this sum was
payable to Hill as the vendor. Each share was charged with a liability
of 30,9. annually to make good the sum reserved to the annuitants, while
working capital was to be obtained by calling up c£*40 per share. The
purchasers of these had the right of choosing twenty-four directors, and
the annuitants, as a separate body, elected seven. The liability on the
shares guaranteed the annuity^. Without waiting to make calls on the
shareholders, yet another scheme was launched in May of the same year,
the object of which was to provide ^100,000 to lay up a stock of beech-
mast. This sum was to be borrowed, and the lenders were promised a
security of ten times the value of their loan, which they could retain in
their own hands, and interest at 45 per cent.^

If all these various financial schemes had succeeded, Hill would
have raised, besides the 25,000 guineas payable to himself, no less than
£2>\Bfi00 for the service of the company. He soon found that he was
unable to convince investors of the solidity of the promised security.
The loan was a failure ; and, so far from making calls on the shares, it
was found difficult to collect the sum of £B. 5s, which was payable on
allotment, much of which was due by the directors themselves. No
profit had been made in the season 1714-15, and in the autumn of 1715
the company " was at extravagant weekly charges in the parks and
forests, where their supervisors had employed vast numbers of workmen
in gathering mast (made doubly tedious and expensive by the wetness
of the season),"" and it was found impossible to pay the annuitants from
the funds in hand, while the shareholders wideavoured to evade the
liability they had undertaken ^

Hill had now another expedient to propound. On September 12th,
1715, he, together with twenty-one others interested, applied for a
charter incorporating the Governor and Company/ for making and vending

^ An Impartial State of the Case between the Patentee, Annuitant* and Sharers in
the Beech-Oil Company, by Aaron Hill^ London, 1714_, p. 4.

2 I.e. 5^000 shares paying SOs. each = £7,500, 50 per cent, on £15,000 = £7,500.
Proposals for a Beech Oil Company, by A. Hill, quoted by Walford, Insurance Cyclo-
pcedia, i. p. 110.

2 Proposals for raising a stock of £100,000 for laying up great quantities of Beech-
Mast for two years, by A. Hill, 1714 [Brit. Mus. T1856 (1)].

* An Impartial State ofths Case between th« Patentee, Annuitants and Shearers, p. 6,

Div. vm. § 8] The Beech Oil Company 1715-20 117

Beech Oil\ He then proposed to the annuitants that they should com-
mute their claims on the following conditions. Their principal should
be " made good to them "" by the company repaying to the allottees
of 1,000 shares the sum of 1 guinea a share — the remaining calls being
in arrear. Such shares thus became the possession of the company, and
they were to be re-issued to the annuitants. Then the latter had
received a sum of 25 per cent, at Ladyday 1715, and a like amount was
payable with the shares. Finally Hill had lent the company <^20,000,
repayable at the expiration of the patent, of which there was ^10,875
outstanding at the end of 1715, and he offered to hand over this
reversion to the annuitants. In this way it was calculated that the
principal would be repaid them, leaving them 1,000 shares as a com-
pensation for the use of their capital by the company. The whole body,
with the exception of some five or six, assented to the scheme, but the
arrangement could not be completed, owing, according to Hill's state-
ment, to the neglect of the directors to assent to the assigning of the
reversion of his loan^ HilPs next scheme was that the annuitants
should exchange their interest, under the arrangement of 1714, for
shares in the company when it was incorporated, receiving, in addition
to the 1,000 shares, already promised them, 3,000 more, making the
whole capital ^40,000 in 8,000 shares ^ However the charter was not
granted, and the affairs of the company were distracted by quarrels
amongst the directors and by actions at law on the part of some of the
annuitants.

Matters remained in this state until 1720 when an effort was made
to revive the company. During this period of excitement, there were
several other schemes for the extraction of oils from vegetables. In one
case — that known as the sunflower patent — the money subscribed was
returned on or after June 29th^, while it was characteristic of the times
that the partners concerned " in the oil-patent with land security " were
invited to register their shares on August 2nd, and a week later they
were informed that they might inspect the deed of co-partnership and
the estimate of profits at Mr Long's shop^ In a calculation of this
kind it is interesting to note that much more is said about the dates of
payment of the calls of 21 guineas each on 1,600 "parts" or shares than
of the manner in which profit was to be earned ^

'^ State Papers, Domestic, Petition Entry Book, xii. pp. 461, 462.

2 An Impartial State of the Case between the Patentee, Annuitants and Sharers, p. 8.

3 lUd., p. 13. * Daily Courant, June 29, 1720.
^ Ibid., July 2, 1720 ; Daily Post, July 7, 1720.

^ Estimate of the Profits from the Meliorating of Oils under a Patent of 7 th May 1720
(Advocates' Library) ; Anderson, Annals of Commerce, iii. p. 345, mentions three
other oil companies — one working on rape, another on poppies and the third on
radishes.

SECTION IX. COMPANIES ENGAGED IN
MISCELLANEOUS MANUFACTURES.

The Tapestry-makers of England (1619 to 1703).

The Patentees for LACQUERiNa after the manner of

Japan (1693).
The Company for making Imitation Russia Leather

(1691).
The Company for making ''German Balls" to preserve

Leather from Damp (1693).
The Society for improving Native Manufactures so as

TO keep out the Wet (1691).

About 1619 the making of tapestry was introduced into England by
Sir Francis Crane, and James I. signed a grant for the erection of build-
ings at Mortlake in Surrey \ In 1625 Charles I. granted Crane d^2,000
a year for ten years, half of which was for the up-keep of the manufacture
at Mortlake and the other half in payment for three suits of gold
tapestries ^ Towards the middle of the reign of Charles II. the making
of tapestry ceased, and in a patent dated October 15th, 1679, the houses,
looms and designs at Mortlake were granted to Lord Sunderland and
Henry Brouncker at an annual rent of 5s., subject to the condition that
the grant was revokable if tapestry-making was not carried on. The
work was started as soon as the patentees obtained possession, but the
manufacture was in want of capital. In 1691 the Earl of Montague,
who then owned the patent, was prepared to surrender the benefit of it
to a company which had engaged to raise a considerable joint-stock, and
some of those interested petitioned on August 21st to be incorporated
as the Tapestry -makers of England^. On September 8th the attorney-
general recommended the granting of incorporation and of such franchises
as would best conduce to the success of the project, since tapestry-making

1 Anderson, Annals of Commerce, ii. p. 372.

2 Feeder a, xviii. p. 60 ; cf. Financial Statement J.

3 State Papers, Domestic, Petition Entry Book, i. p. 177.

Div. vin. § 9] Tapestry, Lacquer, Leather Cos, 1691-4 119

would consume considerable quantities of wool and give employment to
poor peopled

With the aid of an increased capital the business flourished. Like
the Blue Paper company 2, the designers of the Tapestry-makers chose
as their subjects " various Indian figures, history, landskips, &c.," and
"the curious and pleasant hangings" were on sale at the Out-ropers'
Office, in the Royal Exchanged In April 1693 the company advertized
that it would have 1,000 pieces for sale in the following month", and in
August specimens of the work were on view at the signs of the White
Horse and Black Boy in Newgate Streets In the following year the
company's office was removed to a more convenient warehouse " by the
Pump in Bishopgate Street^." Houghton describes the tapestry made in
1694, as a " pretty adornment for gentlemen's second and third rooms
and for ordinary folks' first rooms^" Some years later, when tapestry-
making was established at London, the company no longer found it
profitable to continue working at Mortlake, and accordingly the King
was asked to allow the members to cease the trade there ^.

As showing the prevalence of the taste for the imitation of Oriental
designs in ornament, an effort was made to establish an English
lacquering industry. On March 29th, 1693, a patent was granted to
Thomas Marty n, who was interested in the saltpetre company^, for this
process, and soon afterwards a company was formed ^^ which was known as
the Patentees Jhr lacquering after the manner of Japan. Houghton con-
sidered that the work surpassed that of the East, and, although his
judgment may err somewhat on the side of enthusiasm for a new
industry, still old English lacquer-work is of very high quality ^^ In
1696, the company advertized that it had made and ready for sale
"a considerable and most curious parcel of goods, viz. cabinets,
secretores, tables, stands, looking-glasses, tea-tables and chimney-pieces,"
which were to be disposed of by a lottery the tickets for which were
10*. each^l

On October 30th, 1691, a warrant for a patent was signed in favour
of John Tyzack and a number of others, who had found out a new and
secret invention " of tanning all sorts of skins for leather and also for

1 State Papers, Domestic, Petition Entry Book, i. p. 186.

2 Vide supra, p. 72. 3 Houghton, Collections, No. 50, July 14, 1693.

* London Gazette, No. 2862. & Ibid., No. 2899. « Ibid., No. 2991.

7 Collections, No. 103.

8 State Papers, Domestic, Petition Entry Book, v. pp. 100-2.
^ Vide supra, ii. p. 473.

10 State Papers, Domestic, H. O. Warrant Book, vi. p. 533.
" Collections, No. 108.

12 Ibid., No. 181, Jan. 17, 1696. As to the craze for lotteries at this period,
cf. A History of English Lotteries, by John Ashton, 1893, pp. 32-79.

120 " German Balls " a7id Waterproof Cos, [div. viii. § 9

converting some sorts of the said leather into imitation Russia leather,
with the same grain, tincture and smell^"; and in the following year
the same privileges were granted for Ireland ^ In 1694, Houghton
expressed himself in rather guarded terms as to the future of this
process, writing that " it would be a great improvement, if brought to
be like Turkey or Russia leather^""

Another industry connected with the leather-trade was the making
of what were known as " German Balls "" — a composition of wax and
other ingredients to preserve leather from damp. On April 4th, 1693,
George Sylvanus applied for a patent for this invention % and by July the
commodity was placed on the market and a warehouse established at the
lower end of the Old Bailey, near Ludgate. Each ball was sealed with
a trade mark of a falcon and spear '^. Like others of its contemporaries,
this company suffered from imitations, and in November of the same
year it advertized offering a reward for the detection of counterfeit
German Balls ^.

As early as 1691, an attempt had been made to make cloth water-
proof. On August 14th of that year, William Sutton and George Hagar
presented a petition in which they stated that they had invented a
" new and extraordinary art of ordering all sorts of stuffs, silks, hats and
leather, so as to make them hold out water and also preventing them
from damage by moths and mildew^,"" and a warrant for a patent was
signed on August 29th ^ The King and Queen were satisfied with the
invention and gave orders to the company in 1694, while in the same
year a warehouse was opened at the Savoy in the Strands

1 State Papers, Domestic, Petition Entry Book, i. pp. 207, 217.

2 Ibid., Signet Office, xii. p. 503. 3 Collections, No. 103.
* State Papers, Domestic, Petition Entry Book, ii. p. 313.

^ Collections, No. 51, July 21, 1693. e Ibid., No. 67.

^ State Papers, Domestic, Petition Entry Book, i, p. 174.

8 Ibid., H. O. Warrant Book, vi. p. 169.

» London Gazette, Nos. 2965, 2967.

DIVISION IX.

COMPANIES AND PARTNERSHIPS, CHIEFLY FOR
MANUFACTURES, IN SCOTLAND.

SECTION I. THE INDUSTRIAL STATE OF SCOT-
LAND IN RELATION TO THE FORMATION OF
COMPANIES.

During the earlier years of the reign of James VI. Scotland had
suffered from internal dissensions, with the result that both domestic
and foreign trade was subject to frequent interruptions. No doubt there
were many wealthy merchants residing in Edinburgh and the ports of
the east coast, who had acquired fortunes by the importation of
commodities from France and Hollands Almost all articles of luxury,
as well as most of the comforts of life, were produced abroad, so that
the chief imports consisted of wines and manufactures. Those exported
were raw materials, such as coal, lead, wool, and linen yarn ; the
management of the shipping of these latter being in the hands of the
organization known as the Scottish Stapled By the time of James VI.
it began to be felt that Scotland was very far behind other nations
in its trade. To the economic ideas of the time it appeared a serious
evil that raw materials were exported and manufactured goods im-
ported. Still worse was it that, as was alleged, the Dutch found a
gold-mine in their fishing off the coasts of Scotland. During the reigns
of James and Charles I. two broad lines of commercial policy were
pursued, but in a somewhat hesitating manner, — the encouragement
of the home and Greenland fishings and the attempt to establish
Scottish manufactures. In a memorial prepared for the King about
1620, by John Keymor, it was estimated that the foundation of a trade
to foreign countries in the exporting offish and manufactures would make
the country richer by ^^8,000,000. He recommends, with much detail,
the vigorous prosecution of the fishings both at home and in Green -
land^ Ideas of this nature had already resulted in the formation of a

1 "Edinburgh Merchants in the Olden Time/' in Edinburgh Papers, by Robert
Chambers, 1861, pp. 9-16.

2 The Scottish Staple at Vere, by the late John Davidson and Alexander Gray,
London, 1909, pp. 86-112.

3 Policies of State Practised in Divers Kingdoms for the Encrease of Trade
(Edinburgh University Library, Laing MSS., Division ii.. No. 52), ff. 3, 22-4.

124 Scottish industrial Schemes 1590-1634 [div. ix. § 1

company to prosecute whale fishing and to trade to India in 1617^ ; but,
owing to engagements made by James I. to the East India Company of
England, it was necessary to recall the patent. An important fishing
company was formed by Charles I., which was intended to have sub-
ordinate associations for each district^. The King reserved the right
of allotting certain counties to persons chosen by himself, with the
result that enterprizes requiring business skill were left in the hands
of prominent courtiers, and it is scarcely necessary to add that the
shareholders suffered. The same policy of grants of monopolies on
personal grounds was extended to the field of manufactures. For
instance, in 1619 privileges were granted to Nathaniel Uddart (son
of a Nicol Uddart who had entertained the King) for a soap manu-
factory at Leith, and in 1634 a monopoly for the same commodity was
conferred on " the King's daily servitor,'' Patrick Mauld^, and in 1610
a patent had been granted to Sir John Hay for the manufacture of
glass at Weems^ A still earlier monopoly had been received in 1590
by several Germans for the production of paper, but none of these
industries were successful^. A much more serious attempt was made
to establish the making of a finer cloth than that which had hitherto
been produced. In fact the watchword of Scottish economic policy
was to "rival the Dutch in fishing and the English in the woollen
trade." With these ends in view seven Flemish weavers were induced
to settle in Scotland in 1601, six of whom were intended to introduce
continental methods of making serges and one those of broadcloth.
The foreigners had expected to be allowed to live together but
the jealousy of the chief towns prevented this, and it was proposed
that one of them should be sent to each of the seven important burghs.
The weavers were forced to appeal to the Privy Council ; for, while the
towns were fighting for the honour of their presence, the men themselves
were in danger of starvation, being neither "entertained" nor set to
work. The Council ordered that they should remain for the present in
Edinburgh, and that in the meantime food and drink were to be given
them, till they were set to work. Six weeks elapsed without any
arrangements being made by the burghs for the employment of the
weavers, and the Privy Council notified the magistrates concerned, that
unless work was started by the month of November, the royal privilege
would be withdrawn. Finally, in 1609, the foreigners were allowed to

^ Vide supra, ii. pp. 361-71. There is mention also of a Scottish Guinea com-
pany which existed in 1637, cf. ii. p. 16.

2 Acts of the Parliaments of Scotland, v. p. 222. Vide supra, ii. pp. 362-5.

3 The Domestic Annals of Scotland, by Robert Chambers, i. p. 610.

4 Ibid., I. p. 428.
6 lUd., I. p. 195.

DTV. IX. § 1] The Cloth Trade 1609-45 125

remain near Edinburgh, at Bonnington, and cloth was actually produced^
The weavers received special privileges from the Privy Council, but
the work was interrupted by the magistrates of the Canongate, who
endeavoured to force the strangers to become freemen, and thus, owing
to the jealousy of the incorporated trades, the work was subject to
frequent interruptions ^

In spite of the many difficulties of the government during the first
half of the seventeenth century, the ideal of a woollen trade that would
rival England's was steadily kept in view. Thus in 1623 an attempt
was made to encourage the woollen and fishing industries by the
formation of local companies. Beyond a communication from the
Convention of Royal Burghs thanking the King for his interest in the
matter, there is no information as to the effects of this proposal on the
cloth traded Again in 1633 the magistrates of Peebles, anticipating
the policy of the trustees of the linen manufacture nearly a century later,
resolved to have spinning regularly taught to the children of burgesses
by a qualified mistress*.

In 1641 an act was passed by the Scottish Parliament to encourage
the production of fine cloth. The native wool was not of a sufficiently
good quality for the making of broadcloth, and therefore Spanish and
foreign fine wool, as well as other materials, such as dyes and oil, were
to be imported free of custom. All cloth produced was also to be
free of taxation ; and, to encourage the introduction of skilled work-
men, their employers were to have complete control over them — in the
words of the statute — "it shall not be lawful for anyone to engage,
reset, or entertain any of the servants of these works without the
consent of their masters^."" In 1645 it was further enacted that the
masters and workers of manufactories should be exempt from military
service and from having troops quartered on them^. On the faith of
these acts, factories were started at Bonnington (where the Flemings had
settled at the beginning of the century), also at Ayr, and Newmills,
near Haddington''. All three works were favourably situated, for at that
time the great wool-producing districts were the border shires, and the

^ Chambers, Domestic Annals of Scotland, i. p. 351.

2 History of Civilization in Scotland, by John Macintosh, in. p. 306.

3 Records of the Convention of Royal Burghs, 1615-76, p. 144.
* Burgh Records of Peebles, p. 272.

5 Acts of the Parliaments of Scotland, v. p. 497. ^ Ibid., vi. p. 174.

7 A Representation of the Advantages that would arise to this Kingdom by the
erecting and improving of Manufactories, but more especially that of woollen cloth,
with an answer to the objections against this last, and an account of its present state
and success of the Manufactory at Newmills for woollen cloath, serges, silk, and worsted
stockings, and of the rules and methods observed by the undertakers in managing it,
with Proposals to such as shall be willing to join in that work. Edin. 1683, p. 16.

126 Ayr, Bonnington, Newmills Cos. 1645-70 [div. ix. § 1

Bonnington and Newmills tnanu factories had the advantage of easy
access to ports where the finer foreign wools might be imported. There
is little information as to the success of the undertaking at Ayr. In
1670 it is recorded that cloth, made by "the manufactorie at Air"" in
1668 and 1669, was distributed by lot^ to the shareholders =. This
undertaking may have been that founded before 1650, but it was prob-
ably a new partnership, established after the Restoration. It may be
inferred that the one at Bonnington met with sufficient encouragement
to establish the industry there, as is shown by frequent references to a
cloth factory at that place from 1683 till the end of the century. The
Newmills factory is reported to have met with considerable success, but
it had the ill-fortune to suffer during the Civil Wars. It happened
that there was a large quantity of cloth belonging to these manu-
facturers at Dundee which was lost when the town was taken by Monk
in 1651 ^

The gi-eat difficulty of these three early undertakings was the
necessity for importing skilled workmen, the hindrances to the disposing
of the goods through the obstructions to free internal trade by the
burghs, the manufacturers not being themselves retailers, and lastly the
want of sufficient capital. The poverty of the country was a very
serious impediment to any progress in manufactures, and, after the
Restoration, attempts were made to remedy this disadvantage. The
expenses of starting an industry, requiring machinery and skilled work-
men, were considerable. Not only had the latter to be tempted from their
homes by large payments, but there were many obstacles placed in the way
of those who wished to obtain manufacturing appliances in England or
abroad ; and in addition the cost was magnified by the necessity of such
payments being made in a depreciated currency, and at an adverse rate
of foreign exchanged After the Restoration a resolute attempt was
made to obviate these hindrances to the establishment of industries by
two acts passed in 1661, which embodied ingenious devices for the
attracting of foreign capital by re-enacting the privileges granted by the
act of 1641, and in addition offering naturalization to foreigners. The
period of exemption from public and local taxes was limited to nineteen
years; and in the special case of linen and woollen works the under-
takers were authorized to have a seal for stamping linens or cloth of a

1 For the system of division of cloth by lot^ vide infra, p. 141.

2 Letter and account, signed James Marr_, ^^ clerk of the manufactorie at Air" in
The Scottish Antiquary, i. pp. 22, 23.

3 Representation of the Advantages,,. of Erecting Manufactories, ut supra, p. 16.

* The Records of a Scottish Cloth Manufactory at New Mills, Haddingtonshire, 1681-
1703, edited from the original manuscripts by W. R. Scott, Edinburgh (Scottish
History Society, 1905), pp. xxiv-xxx.

Div. IX. § 1] Scottish Acts of 1661 and 1681 127

certain standard. To prevent the recurrence of friction between the
foreigners and natives, and also as a further encouragement towards
the introduction of capital, it was enacted that, inasmuch as manu-
factures previously established had for want of sufficient stocks, counsel
and assistance been crushed by those in more wealthy countries, in any
case where such enterprizes were beyond the means of individuals joint-
stock companies might be formed, with full powers to incorporate
themselves ; and the making of cloth, linen and stockings is indicated
as a suitable field for such associations. It was further provided that
no one except members of such companies should be allowed to export
the goods made by that company. Rules were also framed for the
internal organization of the companies. The minimum subscription
was five hundred merks Scots, and the qualification for a directorship
was one thousand merks Scots ^ .

This legislation failed to effect the object for which it was designed,
because, though considerable privileges were granted to the proposed
industries, it was thought that they would not be in a position to
compete on favourable terms with manufactured goods, imported from
abroad where such trades had long been established. In fact most of
the " infant industries,"''' started immediately after the Restoration, were
afforded protection by means of patents or acts of the Privy Council
prohibiting importation of the commodities they were intended to
produce. A period of twenty years elapsed before measures were taken
for a complete protection of the home products. This movement re-
ceived its final shape during the visit of the Duke of York to Scotland
in 1681. On March 1st and again on April 11th of that year the
Privy Council prohibited the importation and wearing of certain foreign
manufactured goods. These acts were followed by a proclamation to
the same effect^. This policy was ratified by an act of Parliament, passed
on September 13th, entitled an "act for encouraging trade and manu-
factures." The heading of this statute has caused the general trend of
its provisions to be misinterpreted, for it is not only designed to en-
courage native industry but also to be a sumptuary law. These two
lines of thought are clearly expressed in the preamble, which states that
" the money of this kingdom has been exhausted and the foreign exchange
raised by the importation of foreign commodities which are superfluom
or may he made within the kingdom hy encouragement given to the
maniifactures thereof. '^ With reference to " superfluities," the importa-
tion of a number of articles of luxury, such as gold and silver thread
(as well as things made of such thread), flowered ribbons, silk-embroidered

1 Acts of the Parliaments of Scotland, vii, pp. 255, 261.

2 Acts of the Privy Council (General Register House, Edinburgh); Acts of the
Parliaments of Scotland, viii. p. 348.

128 Companies under the Actof\^%\ [div. ix. § 1

cloths, were forbidden to be imported or worn. To encourage home
manufactures similar prohibitions were enacted against the importation
of a large number of commodities, such as linen, cambric, calico. East
India linen and all stuffs made of linen or cotton wool, excepting arras
carpets ^ Persons possessed of either capital or technical knowledge
were encouraged to settle in Scotland and found new industries or im-
prove existing ones, not only by the prohibition of foreign manu-
factures but also by the grant of additional privileges. They were
to receive naturalization on condition of setting up manufactures of
cloth, linen, stockings, or soap, and teaching the trade to Scotsmen.
All the raw materials imported for a manufacture, which received the
benefit of this act, were to be admitted free of custom and all public
dues for ever. Manufactured products exported were exempt from
duties for nineteen years after a given industry was founded. The
capital invested was declared not subject to public or local taxes. The
works, recognized as a manufactory, were not liable for the quartering
of soldiers, and servants employed escaped military service for seven
years. Finally the act ratifies 1 Car. II., Nos. 43 and 46, in pro-
hibiting the export of raw materials produced at home, such as lint
or yarn^

Although the acts of 1661 and 1681 had given partnerships the
right to incorporate themselves, to obtain the privileges offered it was
necessary for persons, who had started or who intended to start a new
industry, to apply to Parliament or the Privy Council. Between 1661
and 1681 applications were made by a company for making wool-cards
at Leith, founded in 1663^, a glass manufactory also at Leith (1664)*,
and the Royal Fishery company (1670)^ These three enterprizes were
granted monopolies. Then there were two sugar works at Glasgow
(1667, 1669)S which, though they had no monopoly, were protected
against foreign competition ; and in 1667 a company for whale-
fishing and soap-making was formed, which was encouraged by a
special act imposing duties on foreign soap, which almost amount to
prohibition''.

On the passing of the act of 1681, which granted protection to
any company or individual that could establish its claim before Parlia-
ment, and more especially after the Revolution, the privileges of this
act were sought and obtained for very many different industries.
Grants to cloth works and glass works were comparatively frequent.
An important linen company, known as "the Scots Linen Manu-

1 Acts of the Parliaments of Scotland, viii. p. 348.

2 Ihid., VIII. p. 349. ^ Vide infra, Section 5.

* Ibid., Section 8. ^ Vide supra, ii. pp. 376, 377.

6 Vide infra J Section 3. ^ lUd.j Section 2.

Div. IX. § 1] Companies under the Act of 1681 129

facture" was incorporated in 1693^ a silk manufactory in 1697% and
manufactures of baizes, stockings, sail-cloth, ropes, cordage from 1690
to 1700 ^ Two new partnerships for sugar refining were formed at
Glasgow in 1696 and 1700^ A company for making white paper was
established in 1694^ In the department of iron, steel-work and mining
there was a number of ventures. A " Company for working mines and
minerals in Scotland '' was formed in 1691? ; another for a draining
engine in 1693 ; a foundry had been established in Edinburgh in 1686.
There were two hardware companies (for making knives, scythes, etc.) at
Glasgow in 1699, 1700, and a co-partnery for smelting minerals (1701)^
Of a more miscellaneous character were two gunpowder works (1690 and
1695), a leather stamping company (1695), a company at Leith for
works in horn and ivory (1695), another to carry on saw-mills at Leith
(1695), and a pottery company (1706)^

1 Vide infra, Section 4c. '-* Ibid., Section 4d.

3 Ibid., Section 4 e. * Ibid., Section 3.

^ Ibid., Section 6. ^ Ibid., Section 7-
^ Ibid., Section 8

S. C. III.

SECTION II. THE GREENLAND FISHING AND
SOAP WORKS COMPANY, OR THE GLASGOW
SOAPERIE (1667-1785).

The manufacture of soap from an early period had been a favourite
industry for the estabhshment of monopolies. In the time of James I.
and Charles I. the production of this commodity was involved in a
net-work of exclusive grants. The searches, fines, and imprisonments
carried out at the instigation of the Society of Soapers of Westminster
created no little indignation in England \ Scotland did not escape the
effects of the same policy. In 1619 a patent was granted to Nathaniel
Uddart for the manufacture of soap. Having erected " a goodly work "
at Leith, he petitioned the Privy Council on June 21st, 1621, that all
foreign soap should be prohibited. In reply the Privy Council ordained
that the importation of soap should be forbidden, provided that Uddart
should sell that made by him at a price not exceeding 24^. per barrel
for green soap and S^s. per barrel of white soap, the barrel to contain
16 stones. By July 1623, several complaints had been made to the
Council, and it was decreed that the privileges granted in 1621 should
terminate in a year from the date of the order 2. Probably this patent,
if not recalled, was allowed to lapse, for in 1634 a new grant was made
to the " King's daily servitor," Patrick Mauld of Panmure. Inasmuch
as Mauld was prepared to provide all the requisites for soap-boiling,
and since the trade was of such a nature that the public would suffer if
" it were left indifferently to all," the monopoly of making all kinds of
soap was granted to Mauld and his representatives for thirty-one years.
In addition, the patent licensed the grantee to fish in the Greenland
and home seas to obtain the oil then required for the production of
soap. He had also the sole right of making potash by utilizing such
wood as was most fit for the purpose, likewise all sorts of ferns and
vegetable things whatsoever. As in other grants by the Stuarts, Mauld

1 A Short and True Relation Concerning the Soap Business, London, 1641 ; vide
supra, Part i.. Chapter xi.

2 Chambers, Domestic Annals of Scotland, i. p. 510. Leith and its Antiquities,
by James Campbell Irons, 11. pp. 141, 142.

Div. IX. § 2] The Glasgow Soaperie 1667-95 131

was to make a payment in return for the monopoly, which was fixed at
£9.0 sterling a year\ This patent would have continued till 1665, but
in 1661 a monopoly for twelve years was granted for the manufacture of
" castle soap 2.""

After the Restoration the attention of the legislature was directed
towards soap, and in 1661 a tax of £Q Scots was imposed on each
barrel imported; at the same time, all materials required by the home
producer (such as oil, potash) were admitted free of duty, while soap
made within the country was exempted from taxes for nineteen years ^
As in the case of sugar, when soap was exported two ounces of bullion
were to be brought to the Mint for every six barrels shipped "*. By a
subsequent act of 1669 the same condition was applied to importation^.

Under the encouragement of these acts, which amounted almost to
the exclusion of foreign soap, an influential company was formed in
1667, with its headquarters at Glasgow, for whale-fishing and soap-
boiling. There were originally nine partners, who subscribed d^l,300
sterling each, making the capital of the undertaking =£^1 1,700 sterling.
At first the chief efforts of the company were directed towards whale
fishing and foreign trade to Greenland and the extreme north of
America and Russia. A large ship (for that time) of 700 tons burden,
and carrying forty guns, was built at Belfast and named the Lyon.
Soon afterwards three or four other ships were despatched. The
company was successful in catching whales, and the blubber was boiled
down at Greenock in extensive premises known as the " Royal Close."
This was only the first stage in the process of soap-making, for the
main works, known as "the Soaperie," were situated in Glasgow at
the head of the Candleriggs. These premises were built on the site now
occupied by Nos. 108-120 Candleriggs and Nos. 12-16 Canon Street,
and consisted of a large square surrounded by houses for the managers,
stores, sheds, and cellars ^

This company, like so many of its predecessors, soon found that
whale-fishing was a disappointing speculation'', and the voyages became
gradually less frequent. After some of the ships had been lost, this
part of the operations of the company was abandoned, and in 1695 the
Committee of Trade was prepared to grant privileges for seven or ten
voyages to any who would adventure «. The Glasgow company, though

^ Chambers, Domestic Annals of Scotland, ii. pp. 80, 81.

2 Acts of the Parliaments of Scotland, vii. p. 47-

3 Ihid., VII. pp. 88, 89, 203.

* Ibid., VII. p. 253. ^ Ibid., vii. p. 560.

6 Glasghu Fades: A View of the City of Glasgow, edited by J. F. S. Gordon,

Glasgow, pp. 873, 874. ^ Cf. supra, ii. pp. 69-75.

8 State Papers, Scotland (at the Register House, Edinburgh), Parliamentary
Papers circa 1695 — List of Acts to be desired.

9—2

132 The Glasgow Soaperie 1695-1785 [mv. ix. § 2

it had obtained in 1685 an act granting it the privileges of a manu-
facture, and also a recommendation to the tacksmen of the Customs
that there should be no abatement of the duties on whalebone and
soap^, does not appear to have responded to this invitation. The
renewal of this part of the enterprize fell to others. Sir John Shaw, of
Greenock, obtained an act granting the privileges of a manufacture to a
company he had formed "with a considerable stock," to carry on the
fishing industry 2, and one of the many enterprizes undertaken by Robert
Douglas, of Leith, was whale-fishing, in which he was " at vast expenses
and great loss^" According to M'Ure all the capital invested by the
Glasgow Greenland fishing and soap company in the former industry
was lost"*.

The Soaperie, freed from the incubus of unfortunate whaling
voyages, was successful. Whether it remained in the hands of the
original company or was sold to a new one does not appear^. In 1700
the manufacture of soap was mentioned as one of the Scottish industries
which was firmly established^ In 1715 the manager advertized in the
Glasgow Courant that he was prepared to sell good black or speckled
soaps at the Soaperie at reasonable rates. The company appears to
have been conducted in a quiet, unenterprizing manner till the beginning
of the last quarter of the eighteenth century. " Senex," who visited the
works not long before the concern was wound up, wrote that "there
appeared to be only about half a dozen men employed, and these were
clamping about the floor in a very inactive manner, having heavy iron
shoes on their feet. It was easy to see that they were working at days'
wages''." In 1777 the buildings were partly consumed by a fire^, and
1785 the whole ground buildings and utensils were advertised to be sol^
by public roup».

^ Acts of the Parliaments of Scotland , viii. p. 490.

2 Ibid., X. p. 80.

3 Parliamentary Papers, 1703 — The Petition of Robert Douglas, elder ai
younger. Soap Boilers in Leith.

* In Glasghu Fades, p. 872.

^ From M^Ure's language it may be inferred that, on the failure of the whalii
venture, the soap manufactory was sold — '^'^all their projects were frustrated," h|
writes, "and that considerable stock entirely lost and nothing remained save the
buildings wherein soap is boiled and now pertains to other people."

^ MS. Discourses anent the improvements may be made in Scotland (Advocates'
Library, Wodrow MSS., 33. 5. 16), f. 15.

' Glasghu Fades, p. 874.

8 Annals of Glasgow, by James Cleland, Glasgow, 1816, ii. p. 367.

» Glasgow Mercury, August 15, 1785, in Glasghu Fades, p. 874.

SECTION III. THE SUGAR-REFINING AND RUM-
DISTILLING COMPANIES AT GLASGOW.

The Wester Sugar Work (1667).
The Easter Sugar Work (1669).
The South Sugar Work (1696).
The King Street Sugar Work (1700).

The refining of sugar had been started at Glasgow during the
Protectorate of Cromwell, or not long after the Restoration. At first
the profits were very large, and, according to Gibson, it was in this
industry that the first fortunes in business were acquired in the West of
Scotland ^ It was not long before the Government availed itself of the
opportunity of raising revenue from the production of a new taxable
commodity, for in 1661 an act was passed requiring that 2 ozs. of bullion
should be brought to the mint for every 60 lbs. of sugar exported I In
1669 this act was modified to the extent of imposing a duty of 6 ozs. of
bullion to be brought to the mint for every cwt. of loaf sugar exported^.
The design of this legislation was to secure that at least part of the
proceeds of sales made abroad should be brought back in bullion, and
that some of this would be handed over to the State to be used as
coinage.

After the passing of the acts of 1661 a partnership was formed in
the year 1667, consisting originally of four persons. "At first the
proprietors got a little apartment for boiling sugar — a Dutchman
being master-boiler — this undertaking proved very effectual and their
endeavours wonderfully successful, so that they left their little apartment
and built a great stone tenement with convenient office-houses for their
work, within a great court, with a pleasant garden belonging thereto''."*'
This building, known as the Wester Sugar House, stood at the corner
of Candleriggs and Bell's Wynd^.

1 The History of Glasgow , by James Gibson, Glasgow, 1777, p- 246.

2 Acts of the Parliaments of Scotland j vii. p. 254.

3 Ibid., VII. p. 560.

* Glasghu Fades, p. 871.

^ Old Glasgow, by Andrew MacGeorge, Glasgow, 1880, p. 155.

134 Wester and Easter Sugaries 1669-81 [div. ix. § 3

About two years afterwards (i.e. in 1669) another partnership for
sugar-refining was established by five partners. This was also successful,
and, according to M'Ure, the joint-stock employed "wonderfully
increased ^^ In 1684 the capital of one of these undertakings amounted
to d£^l 0,000 sterling^. The buildings, afterwards erected for the refinery
founded in 1669, were known as the Easter Sugar Work. An illustra-
tion of the building, which was remarkable for its great height
(considering the date when it was built), is given in Glasghu Facies^.
On the passing of the act of 1681 for the encouragement of trade and
manufactures, the partners of both these works presented a joint
petition to Parliament asking that the privileges offered by the act
should be extended to their undertakings. They stated in support of
their request that they were in a position to sell sugar at one-third of
the price at which it had been imported, and on this and other grounds
both Sugar Houses obtained the privilege of a manufacture for nineteen
years from 1681 ^

Soon afterwards an event happened which threatened the success of
the Wester undertaking, and which at the same time shows a peculiar
risk to which these very small companies or partnerships were subject.
Peter Gemmill, one of the four original partners, had died, leaving his
share in the concern to his wife. She was unable to take part in the
management "as partners should and do, because it requires great skill and
pains." She also refused, according to the complaint presented to the
Privy Council by the other partners, to contribute her share, or to
reckon according to the contract signed by all the partners. As a
result the works were absolutely at a stand, the stock of materials was
wasting, and the servants idle — the latter meaning a loss of £\Q sterling
per month. The other partners prayed the Privy Council to settle the
value of the widow''s share, and they would buy her out. In the end,
however, the magistrates of Glasgow were directed " to compose the
dispute," and there is no further information as to whether the share in
question was transferred, or whether the female partner became recon-
ciled to the "great pains" of business^ If any conclusion can be drawn
from the state of the business when M'Ure wrote his View of Glasgow ^
it would appear that though many of these West of Scotland partner-
ships at any given time were confined to a few persons, the interest was
not long retained in one family, for in this particular case, in M^Ure's

^ A View of Glasgow J ut supra, p. 282.

2 Collection of Petitions to the Barons of the Exchequer (Edinburgh University
Library) — Petition of the Masters of the Sugarie Works at Glasgow.

3 p. 643.

* Acts of the Parliaments of Scotland, viii. p. 360.
6 Acts of the Privy Council of Scotland, 1862-5, ff. 187, 188.

Div. IX. § 3] The Production of Rum 1681-95 135

time, there were six partners, and none of the six had the same name as
any of the original four\

Probably one reason for the continued success of these sugar works
was that the refining industry was supplemented by the production
of rum. The rum was sold to great advantage in the colonies, and
a considerable amount of it was consumed at home. This branch of
the industry, however, met with some hindrances from various sources.
Owing to the system of leasing the collection of taxes to private
individuals, the tacksmen of the Customs did not obey the different
acts of Parliament designed to encourage home industries. In fact,
as a contemporary writer expressed it, " they do not regard the laws but
their own profit, per fas et iiefas'^^ In the sugar industry, for instance,
though exemption from Customs had been granted by the act in favour
of the Wester and Easter Works in 1681, a few years later the tacksmen
at Edinburgh seized a quantity of rum consigned for export by the
proprietors of these works. The case was debated before the Exchequer
in April 1684, and the claim to exemption from duties was allowed^.
The matter did not rest at this stage, for a counter petition was
presented declaring that the trade in rum ought to be suppressed, as this
drink was injurious to the health of the lieges^ Though this attack
on the making of rum failed for the time, it eventually produced a
temporary result, for in 1695 an act of Parliament was passed pro-
hibiting both the making and sale of rum, except for export, on the
grounds that it hindered the sale of strong waters made of malt, and
also that "being a drug rather than a liqour," the consumption of it
was prejudicial to healths This act was repealed soon afterwards. As
against this short-lived repressive legislation is to be counted the
imposition of a duty« of ^6 Scots per cwt. on imported sugar candy.
The Royal Burghs too had an intention of supporting the industry, but
if any steps were taken there is no record of their nature''.

On the settlement of domestic affairs in Scotland after the Revo-
lution, when a serious effort was being made to develope home manu-
factures, it was to be expected that one of the first enterprizes that
would attract the capitalist would be that which was officially declared
to have been "a most profitable one^." In 1695 Robert Douglas, of

^ Glasghu Fades, p. 871.

2 A Letter to a Member of Parliament, Edinburgh^ 1700^ p. 13.

3 Collection of Petitions to the Barons of the Exchequer (Edinburgh University
Library)— Petition of the Masters of the Sugarie Works at Glasgow.

* i6irf.,— Petition relating to the Sugarie Works, Glasgow.
^ Acts of the Parliaments of Scotland, ix. p. 462.

6 Ibid., X. p. 34.

7 Records of the Convention of the Royal Burghs, 1677-1711, p- 95.
^ Acts of the Parliaments of Scotland, x. p. 66.

136 South and King St. Sugaries 1695-9 [biv. ix

Leith, who was at the same time promoting works for the manufacture
of soap, earthenware, china, and starch, was granted the " privilege of a
manufacture" for the usual term of nineteen years, not only for the
diverse undertakings already mentioned, but also for sugar works from
which he was entitled to export rum to the amount of 18 tuns yearly \
In spite of this attempt to settle the industry at Leith, the seat of the
trade remained at Glasgow. In 1696 an act was passed in favour of
Robert and James Montgomery (who had at least one other partner
associated with them), which stated that, owing to the success of the
industry, the number of works should be increased. Accordingly the
same privileges, already granted to the other undertakings, were con-
ferred upon this one under the title of the New Sugar Manufactory at
Glasgow"^. Following the custom of the existing partnerships, this
undertaking adopted a local designation, and its works became known
as the South Sugar House. It was described by M'Ure as situated on
the west side of Stockwell Street, and consisting of a large court,
surrounded by high and low apartments, with cellars, a store house,
boiling houses with distilling apartments, pleasant gardens, and all con-
veniences whatsoever^.

There were now West, East, and South Sugar Houses, and it might
be expected that the next to be founded would be the North Sugar
House. As a matter of fact there were works under this title which
were situated close to the Wester House, and appear ultimately to have
been absorbed by the older undertaking''. The Northern concern, how-
ever, was founded later, and the fourth Sugar House, known as that at
King Street, was granted the privilege of becoming a statutory under-
taking in 1700 ^ The act is in favour of Matthew and David Campbell,
but soon afterwards the partners were six in number. In fact, during
the first half of the eighteenth century, these and other co-partneries
consisted of from five to ten of " our high-class citizens, such as our
Provost, Baillies, and Deans of Guild, with a ' Sir John ' or a ' Sir
George"* scattered here and there among them^"" It is related that
there was much consternation in Glasgow when, in 1736, the six
partners in the Easter Sugar Work, comprising the Provost, two Bailies,
the Treasurer of the City, and a goldsmith were bought out by a new
and unknown co-partnery, called " Robert M'Nair, Jean Holmes' and
Co."' The title of the purchasing "Co." was in reality a somewhat
ponderous joke. M'Nair was a " new man," who had acquired consider-

^ Acts of the Parliaments of Scotland, ix. p. 491. ^ Ibid., x. p. QQ.

3 A View of the City of Glasgow, p. 283.

* Giasghu Fades, p. 871.

^ Acts of the Parliaments of Scotland, x. p. 212.

^ Qlasghu Fades, p. 440.

Div. IX. § 3] The Sugaries after 1700 137

able wealth, and finding that all undertakings of magnitude were in the
hands of co-partnerships, he, as a satire on the prevalent custom, regis-
tered his firm in his own name and that of his wife, thereby forming
literally " a one man *" company \

The Glasgow Sugar Houses constitute an exception to the general
rule that few industrial companies founded in the seventeenth century
survived the removal of protection after the Union. This fact is the
more interesting, since the sugar trade had fewer privileges than the
cloth, linen, or paper companies. It had been founded before the act of
1681, and there was never a complete prohibition of competitive
products. Even the exemption from duties had ceased by 1715, for
in that year the Crown sued the Leith refiners for ^40,000 sterling of
" bygone '"' duties. Eventually a compromise was effected by which
the claim by the Crown was remitted on condition that the refiners
should surrender their rights to exemption from duties under their
private acts.

^ Glasghu Fades, pp. 438-40.

SECTION IV. TEXTILE COMPANIES.

A. The Woollen Manufactory at Newmills in the
SHIRE OF Haddinoton (1681-1713).

The acts of the Privy Council and of Parliament in 1681 for the
encouragement of trade and manufactures were far from being specu-
lative, for in that year there were several proposals for the development
of Scottish industries. Prominent amongst these was one which aimed
at the establishment of a large cloth-manufacturing company. This
scheme, indeed, was probably one of the reasons of the legislation of
1681, for the Duke of York (afterwards James II.), who was then
visiting Scotland, had approved of the idea. Finding that the country
had few commodities to export to pay for imports of cloth, etc. from
England, whereby " English money was not to be had under 6 or
7 per cent, [and was] scarce at any rate,"*' while the exchange between
Edinburgh and London had risen,as against Edinburgh, to between 12 per
cent, and 15 per cent., he favoured a plan of establishing works for the
production of fine clothe He "invited and encouraged'' the under-
takers, some of whom were Englishmen of substance, so that with the
prestige of royal patronage there was no difficulty in finding an
adequate amount of capital. The chief promoters of the company
were Robert Blackwood, an Edinburgh merchant of repute who was
afterwards master of the Merchant company, and Sir James Stanfield,
a man at that time of considerable wealth 2. The part taken by Stanfield
in the formation of the undertaking in all probability decided the
locality of the works. He had acquired a property near Haddington,
then known as Newmills^, which formerly belonged to the local
monastery^. The situation was evidently a suitable one for the in-

^ A Representation of the Advantages... of erecting Manufactories, ut supra, p. 3.

2 Ibid., p. 3; Edinburgh Papers, by Robert Chambers, 1861, p. 23. Robert
Blackwood was a director of the Darien Company, to which he subscribed £3,000
stock. He was a member of the '^^ Committee of Improvements" of that Company.
— Darien Papers, pp. 31-4.

3 The modern name is Amisfield, vide infra, p. 158.
* Statistical Account of Scotland, 1702, vi. p. 539.

Div. IX. § 4 a] Formation of a Cloth Company 1681 139

dustry, being in a good wool-producing district, and within easy reach
of Edinburgh. As already shown, it had been the site of a similar
undertaking thirty years earlier^ Stanfield was prepared to lease to the
company his walk mills " and all his office-houses, which are many,
great and spacious '" at what was then considered a moderate rent 2.

The very interesting document, which might be characterized as the
prospectus of the company, is in existence^. It was calculated that a
capital of <£'5,000 sterling or d^60,000 Scots would suffice to purchase
and maintain 20 looms employing 233 hands, besides providing working
capital. A detailed estimate of the probable output was made, and it
was considered that there could be produced annually 55,823 ells of cloth,
realizing, on an average, ^^55,823 Scots. Thus the yearly turnover
would have almost equalled the capital. The details for the cost of
production throw much light on the current rates of wages, and the
total expenses under this head, together with the provision of raw-
material, amounted to nearly .£^38,900 Scots. To this was to be added
the payments necessary for foreign skilled workmen. The rent of the
works was only payable after legal interest had been earned on the
capital, so that it does not appear in the working expenses. Thus, in
the form of a modern prospectus, the estimates might be summarized as
follows :

The profit anticipated from the factory —

Scots Sterling
Receivable for cloth, 55,823 ells, averaging £1 Scots per ell ... £55,823 £4,652

Less expenses — Wages £18,144 Scots per ell

Materials £20,744 Scots per ell

£38,888 £3,241

Profit (subject to payments to foreign workmen) £16,935 £1,411

This (not allowing for deductions) exceeded 25 per cent, on the
capital.

A company such as this, with great privileges from the State, was
objected to by many. Conservative people complained that it was
a novelty, and that the cloth could never be so good as that made in
England. Others were of opinion, even if the cloth were sufficiently
good, it could never be sold as cheaply as that imported prior to the
prohibition. While the works were being erected and the workmen
procured, good cloth could not be obtained, and afterwards, even
when the producing stage was reached, the company could not manu-

^ Vide supra, p. 125.

2 A Representation of the Advantages .. .of erecting Manufactories, ut supra, p. 18.

3 The Records of a Scottish Cloth Manufactory at New Mills, Haddingtonshire
1681-1703, edited by W. R. Scott, Edinburgh (Scot. Hist. Soc), 1905, pp. Ixxxiv.-

140 The Newmills Cloth Company [div. ix. §

facture enough to supply tKe whole country. Thus the temptation to
import cloth, in spite of the Proclamation and the act of Parliament,
would be so great that it would be impossible for the company to gain
the encouragement expected and intended by Parliament and the Privy
Councils On behalf of the company it was shown that ultimately it
would be possible to produce as cheaply in Scotland as in England,
owing to the fact that " nowhere else do workmen live so cheaply as in
Scotland 2." Where so large a part of the cost of production consisted
of wages, this was a most important consideration, which was bound in
time to affect the market-price. In fact, as the writer expresses it,
"where cloth can be cheapest made, it can be cheapest sold"; but the
question was would it he under a system of rigid protection .^^ This
is partly answered by the admission that it was not intended that the
Newmills company should supply the whole country, and all information
was offered to others who might intend to set up manufactories else-
where^. To attain the desirable end of home-made broadcloth
eventually selling as cheaply as that made abroad, and to prevent the
exportation of bullion, it is urged that patriotic Scotsmen should be
content with a cloth " a little dear at first," owing to the great cost of
"importing looms and procuring foreign workmen, besides the many
losses and inconveniences attending beginners," so that the consumer
was to pay for the mistakes of the producer*.

The promoters of the scheme were fully convinced of the personal
and national advantages to be derived from the undertaking, and on
May 10th, 1681, the document known as "the great contract" was
signed ^ The members of the company had no little pride in this
document. " We have entered into a mutual contract," one of them
writes, " whereby we have bound ourselves to such rules and methods
that the undertaking cannot fail except in case of a public and universal
calamity ^" The " methods" mentioned are of great interest, not only
as an early instance of joint-stock organization for a manufacturing

^ A Representation of the Advantages, ». of erecting Manufactories, ut supra, pp. 8, 9.

2 It appears from the minutes of the company that it was necessary to import
all the skilled labour at higher wages than those ruling in England. Such work-
men were bound to train Scottish apprentices, so that in time (but only after a
considerable interval) the company might have obtained the benefit of a cheap
labour supply. The rates of wages are tabulated in Records of a Scottish Cloth
Manufactory, ut supra, p. xxiii.

3 A Representation of the Advantages. ..of erecting Manufactories, ut supra, pp. 10, 22.

4 Ibid., p. 11.

^ A copy of this document, which was entitled '' Articles aggreed upon by the
merchant erectors of the cloath Manufactorie at Newmilnes," is printed in the
Records of a Scottish Cloth Manufactory, ut supra, p. xc.

^ A Representation of the Advantages .. .of erecting Manufactories, ut supra, p. 19.

Div. IX. § 4 a] " The Great Contract " 1681 141

company, but also as showing in several directions interesting traces of
the transition from the regulated to the joint-stock type of organization,
j Four general meetings were to be held in each year. At the meeting
in May five persons were to be chosen as managers, and (after the first
election) two of the former managers were to continue in office, and
three new ones only were to be elected. The chairman at both
managers' and general meetings was called the praeses, and all orders
for payments were signed by him. The managers were to meet at least
once a week. There were certain self-denying ordinances relating to
the holding of stock. During the first three years no payment what-
ever was to be made to stockholders by way of dividend, for the second
three years proprietors were to receive the legal rate of interest on their
capital and no more. The balance of profit remaining at the end of the
sixth year (after payment of interest for the second three years) was to
be added to the original capitals Sir James Stanfield also met the
company in a generous manner. The rent of the ground and buildings
was not to constitute a charge against the gross profit, but was to be
deferred until the legal interest had been earned and paid on the capital,
and was to be charged against the remaining profit^. There was also a
remarkable limitation of the rights of bequest to the representatives of a
member of the company — his stock passed to female heirs without division,
and if the beneficiary were a minor only one tutor or curator could have a
voice at the meetings ^ The regulations and obligations of the members,
as to the disposing of the cloth produced, are important. The cloth was to
be brought to the warehouse of the company at Edinburgh, which was
situated " below the Trone Church ^.''' The managers, having ascertained
the cost of production, added 9^d. per 1,9. per ell, or in other words
allowed as manufacturer's profit 16 per cent, on the cost of production.
The cloth so valued was apportioned in convenient quantities and distri-
buted by lot amongst the proprietors, each of whom had the right to
draw once for each c^lOO sterling of his stock. If a member who drew
a quantity of cloth failed to remove it within fourteen days, it was sold
by public roup. When there was a loss as compared with the prime
cost, that loss was charged to the defaulter ; if on the other hand the

* A Representation of the Advantages... of erecting Manufactories , ut supra j
pp. 19, 20.

2 Ibid., p. 18.

3 These and other similar regulations probably arose from the condition that
cloth was only saleable to shareholders and members of the Merchant Company.
The intention appears to have been to confine the trade to what were called in
England legitimate merchants, i.e. those who had served an apprenticeship. At
the same time it is to be noted that the company admitted persons of distinction as
shareholders.

^ The Edinburgh Courant, No. 184, August 16-19, 1706.

142 The Newmills Cloth Manufactory [div. ix. §

sale showed a profit, the gain was credited to the company \ The
reasons for pro rata distributions of commodities to shareholders of
early companies will be more apparent, especially in Scotland, when the
great restrictions of trade even within the country are remembered. By
such a device, the cloth manufactured was distributed in many directions
where the company in its corporate capacity could find no opening^ In
the case of the Newmills company, there was the further advantage that
every proprietor as a retailer was vitally interested, altogether apart
from his being a stockholder, in preventing or at least reporting cases
in which foreign cloth was imported. It sometimes happened that the
rule, confining the distribution of cloth to members, was relaxed in
order to conciliate persons who might be useful to the company. On
another occasion the cloth drawn for a member, who had failed to pay
the calls on his stock, was, by resolution of the managers, assigned
to another shareholder. Bailie Douglas, who had obtained none by lot,
he having befriended the company by lending money for "supplieing
their needfull occasions^." It is an interesting comment on the ex-
pressions of opinion as to the solidarity of the members of the company
amongst themselves that less than a year after the signature of "the
great contract" some of the stockholders were dissatisfied with the
proceedings of the managers, and wished to have the plans of the board
explained to them. It was pointed out that any member might be
present at meetings of the managers, and that the books were always
open to inspection. Besides it was suggested that the stockholders
should appoint a committee from their own number to report on all
proceedings of the managers since the formation of the company^.

As already shown the contract of co-partnership was signed on
May 10th, 1681, and from the 22nd of June the meetings of the
managers were recorded in a minute-book, preserved in the University
Library, Edinburgh. On the title-page there is the inscription, " Book
for the Managers of the Manufactories Weekly Sederunts," and the
records of proceedings extend till March 21st, 1691. The records have
been carefully kept, and reference was facilitated by the ingenious device

1 A Representation of the Advantages... of erecting Manufactories, ut supra j p. 20.
This regulation was a modification of that originally intended. According to the
" Memoriall " {Records of a Scottish Cloth Manufactory, pp. Ixxxiv.-ix.)^ the master
was to estimate the cost of production^ and the managers were then to add to this
sum the diflference between it and the price at which they had been accustomed to
purchase similar fabrics.

2 As a rule the minutes do not mention the habitation of purchasers except in
a few cases. Some of these include places such as Glasgow, Dundee, Linlithgow,
Stirling, &c.

3 Records of a Scottish Cloth Manufactory, § 270.

4 Ibid., §§ 128-36.

Div. IX. § 4 a] Organization of the Industry 1681-3 143

of numbering each order of the managers — a plan that would have
advantages for the modern secretary.

The first steps, taken by the managers, consisted in the procuring of
looms and other appliances and the still more difficult task of securing
competent workmen. It was agreed that the men should be paid by
piece-work \ Considerable difficulties were experienced in inducing
hands to come from England, and it became necessary for some of
the managers to go south to secure trained weavers^, some being
brought from Yorkshire, others from the west of England. By July
1681, a head of the works, called the " master of the manufactory" had
been appointed, and in August the men had arrived at Newmills^ By
October two looms were in operation though as yet only " coarse cloth ''
was made^. Mixed cloth {i.e. cloth made of native and foreign wool)
was ordered to be tried early in January 1682, and before the end of
the month preparations were in train for the eventual production of
fine cloth ^, directions being given that only the best wool should be
purchased. As progress was made it was found that more plant was
required, and estimates were considered on September 20th, 1682. By
February 19th, 1683, ground for extensions was needed^ Meanwhile
great care was taken of the quality of the cloth. By order of the
managers, dated September 27th, 1682, no sales of serges or stockings
were to be made at Newmills, all the goods made being sent to Edin-
burgh^. In April 1683 the master was recommended "to take great
care in improveing the spinning and dressing of the cloth that it be
good and sufficient cloth, and that the rents and too near shearing of
some cloth lately sent in be prevented in time coming^." All the cloth
sent to Edinburgh was to be duly weighed and measured ^ The number
of looms at work had now increased from two in 1681 to a total of
twenty-seven, of which twenty-five were used for cloth and two for
serges ^^. This plant proved insufficient to meet the demand, and about
the same time ten new looms were ordered, which would bring the
production up to 12,000 ells a year, the output being as yet only one-
quarter of that calculated in the "Memoriall." In addition, after
considerable trouble, some stocking-frames had been brought from the

1 A Representation of the Advantages... of erecting Manufactories, ut supra, p. 18.

2 Records of a Scottish Cloth Manufactory, §§ 208, 237.

3 A Representation of the Advantages... of erecting Manufactories, ut supra, p. 18.

4 Ibid., p. 12.

^ Records of a Scottish Cloth Manufactory, §§ 107, 181.

6 Ibid., §§ 213, 289. ^ Ibid., § 225.

8 Ibid., § 303. For the meaning of shearing, vide the description of the method
of manufacturing, ibid., pp. xix.-xxii. ^ Ibid., § 255.

10 Ibid., § 307; A Representation of the Advantages... of erecting Manufactories, ut
supra, p. 12.

144 The Newmills Cloth Manufactory [div. ix. §

west of England and were at work^ In 1684 the output had attained
considerable volume, as the provision required for a single payment for
materials was estimated to amount to 66^1,428. 9s. M. sterling 2, and th
financial results appear to have been sufficiently satisfactory to justify
the recommendation of the payment of legal interest on the stock
immediately after the expiration of the first three years as provided in
" the great contract^." As soon as the manufacture of fine cloth was
established, a detailed estimate was framed of the prime cost of pro-
duction, which gave the following results :

Made into cloth

Quality of wool measuring Total cost Cost per ell

£ s. d. s. d.

All Spanish At least 27 ells 19 7 3 14 4

Half Spanish, half English „ „ 17 9 0 13 0

All English „ „ 12 11 7 9 4

Common „ „ 8 14 0 6 6*

Meanwhile the company had been making efforts to secure the
patronage of the Government for the provision of military uniforms,
which were just beginning to come into vogue in Scotland, as an act of
the Privy Council naively expresses it " to distinguish sojers from other
skulking and vagrant persons^,'''' On February 22nd, 1683, the company
were licensed by the Privy Council to import ^b^Q ells of stone-grey
cloth from England for clothing General DalzelFs regiment of dragoons,
as he could not procure as much cloth of the colour he required in
Scotland. On the 16th of March this order was modified to the extent
that General Dalzell might appoint any person he pleased to import
the cloth on condition that the price should not exceed 5s. per ell, and
that it should be sealed with the seal of the Newmills company^. It is
evident from a consideration of the cost-price of the Newmills cloth
that, at this date, it was not merely a " little dear "" but considerably
higher in price than that made in England. Therefore cloth, imported
at a maximum price of 5^. per ell, would mean an important saving in
army clothing as the lowest cost-price in the foregoing table works out
at nearly Qs. 6d. per ell. The managers of the company petitioned
the Privy Council against this violation of the act of 1681, and on
August 28th, 1684, representatives of the company were heard by a
special Committee of the Council. It was asked whether the Newmills

1 Records of a Scottish Cloth Manufactory, § 326.

2 Ibid., § 482. Most of the terais employed are the names of dyes, e.g.
'^mather" (madder), ^^argall" (argol), potash, copperas, cochineal, fustic.

3 Ibid., § 450. * Ibid., § 352.

^ Records of the Privy Council, quoted by Chambers, Domestic Annals of Scot-
land, II. p. 419.

6 Acts of the Privy Council of Scotland, 1682-5, f. 79.

Div. IX. § 4 a] Contracts for Army Clothing 1683-6 145

works could furnish enough cloth in a short time at reasonable rates for
the forces, and the deputation undertook on behalf of the company to
supply the army as quickly as cloth could be imported from England
and at the same rates. They were also prepared to dye the cloth
ordered any colour required, to show samples within a fortnight, and to
give security for carrying out the contracts It would appear that this
offer was not accepted, or if accepted, that licenses for the importation
of English cloth continued to be given. A fresh permission was issued
to General Dalzell on September 16th, 1685, to import 100 ells of stone-
grey cloth at 9*. per ell, for the use of his officers, and 1,100 ells for
soldiers at Qs. per ell'^. On January 8th of the following year the
Captain of the Edinburgh Town Guard received a similar license for
scarlet cloth, and on the same date, and again on February 3rd, further
exemptions were granted to other officers ^

Not only had the company to face the loss of the government
contracts it had anticipated, while still in its infancy, but it had many
difficulties with its work-people. When it is remembered that the
employees numbered over seven hundred, and that some of these had
come from a distance, that others were foreigners, and that the native
Scot had little sympathy with imported labour, it need occasion no
surprise that much of the time of the managers and master was spent in
settling disputes at the mills. They found " the country people very
backward to anything new or strange and not easily drawn from their
old way of living, though the new be more comfortable and better^.""
Some of the skilled workmen not only would not obey orders but
incited the others to quarrels, and it became necessary to ask the co-
operation of the Provost of Haddington to have two discharged men
removed from the districts Within the company matters remained
harmonious. At first some of the managers did not attend the
meetings regularly. This was remedied by the institution of a system
by which each manager deposited two dollars from which the sum of
sixpence was to be deducted for each absence^. At this time, and prior
to the building of the company's hall, the meetings of managers were
held in the back -shop of a John Little, and at various coffee-houses.
At first some of the members were dilatory in paying in their sub-
scriptions'', and others did not remove the cloth they had obtained by
lot within the specified time^ Otherwise the minutes show that the
internal working of the company was quite satisfactory.

1 Acts of the Privy Council, 1682-5, flF. 473, 474.

2 Ibid., f. 500. 3 Ibid., If. 646, 647, 670.

* A Representation of the Advantages... of erecting Manufactories, ut supra, p. 10.

^ Records of a Scottish Cloth Manufactory, § 244.

6 Ibid., § 22. 7 lud., §§ 73, 135. « Ihid., § 241.

S. C. III. 1^

146 The Newmills Cloth Manufactory [div. ix. § 4 a

It was fortunate that the members were united, for difficulties had
to be faced. The government had made a serious mistake in granting
licenses for the import of English cloth, which tended to make the act
of 1681 a dead letter. In any case, there were certain to be many
evasions of the law as long as importation remained profitable. Owing
to the system of the farming of the customs, the control of commodities
imported had, to a certain extent, passed out of the hands of the
government, and when the State itself set the example of making
exceptions to its own legislation, it was to be expected that private
persons would endeavour to bring English cloth into the country in
spite of the prohibition. Noblemen, who travelled abroad, returned
with many years' supply of foreign cloth, and it was said that their
servants concealed considerable quantities which they sold^ As early as
1683 the Newmills company became alarmed at the amount of cloth
imported, and Sir James Stanfield was asked to use his influence with
the officers of State in favour of a more strict adherence to the law 2. In
August of 1683 a complaint had been made against the company, but
was " superseded " by a proclamation in its favour, after which measures
were taken against a number of Edinburgh merchants who were known
to deal regularly in prohibited cloth. They had been invited to join
the company on condition of taking up stock at par and paying a
premium equal to the amount of interest which had not been withdrawn
by the original proprietors. The " interlopers,'' however, as if to " show
their incorrigibleness and obstinacy," "slighting so great a mark of
clemency," imported more cloth in the few months after the proclamation
than in the three years before. The Privy Council decreed that the
goods should be seized and burned, besides which the offenders were
condemned to pay a fine^. Only a few weeks later a member of the
company. Councillor John Baillie, was found to have imported English
cloth to the value of ^£"400 sterling, and it was decided that the cloth
was to be burned by the common hangman, and his stock in the
company forfeited^ The company saw the expected monopoly slipping
away, and in 1685 the managers complained that they were in danger
of being "utterly ruined and broke ^" On March 4th it was decided to
call a general meeting to consider whether the undertaking should stand
or be dissolved ^ Probably this language was exaggerated, inasmuch as

^ Parliamentary Papers, 1702 — Memorial concerning the State of Manufactures
before and since the year 1700.

2 Records of a Scottish Cloth Manufactory, § 271.

3 Chambers, Domestic Annals of Scotland, ii. pp. 420-1.
* Chronological Notes of Scottish Affairs from 1680-1701, by Lord Fountainhall ;

Edinburgh, 1822, p. 91.

^ Chambers, Domestic Annals of Scotland, ii. p. 420.
« Recwds of a Scottish Cloth Manufactory, §§ 640, 646.

Div. IX. § 4 a] Imports of Prohibited Cloth 1683-6 147

a dividend had been paid in the May of the previous year, but it
impressed the Privy Council, which had to face the alternatives of either
allowing the act of 1681 to become a dead letter, or else taking measures
to enforce it. Eventually it was decided to adopt the latter course, and
the company was requested by the Lord Secretary to submit a statement
of its grievances for the consideration of the Privy Councils The
address and memorial were remitted to a committee, which reported on
August 7th, 1685, and the Privy Council, by an act of August 14th,
explicitly ratified the forfeiture of the interest in the company of any
member who imported prohibited cloth. It further forbids, under
heavy penalties, the importing, wearing, or selling of all foreign cloth
and serges, silk gloves and stockings, as well as worsted stockings. The
company, or its agents, had full powers to seize any of the prohibited
goods, to sue persons contravening the act before any competent
tribunal, and to retain one-half of the penalty to defray expenses of
the seizure. In cases of doubt as to whether certain commodities were
native or foreign, the possessors of such goods were compelled to declare
on oath from whom they had obtained them. As a further encourage-
ment to the company, the Privy Council agreed to cease the granting
of licenses for the importing of English cloth to supply the troops,
on condition that the company should produce sufficient quantities
of the required colours, and at a rate to be agreed upon by the
company, with the proviso that, in case the price asked was found to
be too high, the Privy Council reserved the right of proposing a new
rate for the contracts 2. On September 11th of the same year a further
addition was made to the powers of the company by the grant of
authorization of breaking open doors, chests, or other places where
prohibited goods were suspected^. Early in the following year a King's
letter and proclamation was issued on behalf of the company ^

Though the extensive powers, conveyed by these documents, afford
an instance of the commercial policy of the times, the methods of
obtaining them, and the consideration given, constitute a curious side-
light on the ethical standard of the age. These are set down in the
most naive manner in the minutes of the managers, just as the various
"gratifications" given by the East India company during the early
years of its history are recorded in the court books. "Mr Colling
M'Kenzie " received five guineas on account of the great care and pains
he had taken in procuring the first act of the Privy Council, and
various subordinate persons were paid smaller sums, ranging from one to

1 Records of a Scottish Cloth Manufactory, § 624.

2 Acts of the Privy Council, 1685, ff. 137, 138.
I 3 iiicl., f. 168.

* Records of a Scottish Cloth Manufactory, § 793.

10—2

148 TJie Newmills Cloth Manufactory [dtv. ix. §

six dollars ^ The sum of <^15 sterling was remitted to London, partly
to "gratify"" persons who had aided the company, partly to pay
expenses ^ On the bill "anent freedom of trade'' being sent to the
King, an official expected to be gratified, and it was ordered that he
should be offered a pair of silk stockings " if that will satisfy him,'"* if
not, four dollars and one dollar for his man. The following resolution
speaks for itself : "It being represented '' to the managers " that the
King's Advocat drawes thess lybells against the transgressours wrong
because he is not informed," persons were to wait upon and inform him,
and at the same time give him ten dollars for himself and his men two
dollars each, and " ingadge " him in time to come^

From the grant of extended privileges until the Revolution the
company enjoyed a considerable degree of prosperity, and, apart from
prosecutions of transgressors, it was able to give greater attention to its
internal affairs. It was a common complaint amongst early Scottish
companies that the expense of skilled labour was very great. At the
end of the year 1686 an attempt was made to arrange a scale of piece-
work wages, which was under no circumstances to be exceeded. The
weavers of the coarsest white cloth were not to receive more than 5d.
per ell, the highest wages for weaving Spanish wool were not to be more
than 14d per ell, while the shearmen were to receive from Bd. to
Sd. per elP. The friction was not confined to the hands, for it was
frequently necessary to remonstrate with more important officials of the
company. The cashier was charged with partiality in the allocation of
the payment for piece-work, and it was ordered that, in the event of
any unjust distribution in future, six times the amount that he had
underpaid or overpaid the men should be deducted from his own wages ^
It was necessary to " discourse and reason " with the master about his
method of dyeing fine black cloth ^, and also to compel him to instruct the
apprentices in dyeing so as to carry out the obligations of the company
under the act of 1 681 ^.

During this period the company had protracted negotiations with
Sir James Stanfield. In 1681 he was a wealthy man, but owing to
the extravagance of his eldest son (who was later executed for parricide)
he was gradually falling into pecuniary difficulties. On March 1st,
1686, he proposed to sell his interest in the land and buildings at

1 Records of a Scottish Cloth Manufactory, § 724. ^ ji^id^^ ^ 793.

3 Ibid., § 1028. It is not easy to distinguish ''^gratifications" given for a
consideration from those of the nature of a bribe. The following appear to be
instances of the latter class: §§271, 272 (''a compleament to the officers of
State"), 356, 508, 541 (for ''favouring" the company in not "casting" army
clothing supplied by it), 564, 571, 597, 623, 681, 724, 848, 883, 1183.

4 Ihid., § 920, p. 141. 6 iiid,^ g 932. « md., § 993. ^ /ft^-^.^ § 423.

Div. IX. § 4 a] Progress at the Works 1686-7 149

Newmills to the company^, and on the 14th of May he was paid for
certain goods he had handed over to the joint-stock undertaking^. The
following year he offered his stock in the company on similar terms to
that obtained at the previous sale. He also notified the managers that
he claimed that the privilege of furnishing cloth for the troops should
be divided between the existing company and a new one which he
proposed to set up in proportion to the number of looms owned by
each^ Owing to Stanfield's death soon afterwards, nothing more is
heard of the proposed rival company. The purchase of the land and
buildings at Newmills, though not effected during his lifetime, was
carried out soon afterwards, as it became necessary to realize the estate
to satisfy the creditors, but it is impossible to determine the date, as
his affairs were still in bankruptcy in 1703^ It was not long before
there was another attempt at competition at Newmills. A former
servant of the company, named Spurroway, had taken the house at
Newmills with a view to establish cloth works. The company felt it
would be a " great inconveniencie...to have another work ther," and so a
message was sent to Spurroway desiring " hime to keep up that good
understanding hes bein betwixt hime and the company ever to this day,
and if he cannot be prevailled with in a fair way to pass from it, to
tell hime the company will take ther oune way to prevent his entering
ther, and will reakon themselves very much disobledged by such methods
quhich they hope he will prevents"

Meanwhile the undertaking continued to make progress. The
practical monopoly of supplying cloth for the army began to prove
profitable. Mention is made of a contract for a troop at Edinburgh,
to supply ready-made coats at 22*. each, when £Q sterling was allowed
for making one hundred and twelve coats (or about 1*. per coat), the
remaining £\Y{ being for cloth ^. It is interesting to notice that on
the eve of the Revolution the garrison at the Bass was clothed in cloth
made at Newmills''. One seems to obtain a glimpse of the possibility of
a secret profit at the expense of the government in the sale of some coarse
cloth, which had been in the warehouse for four years, to Lieutenant-
General Douglas. This cloth had been valued at Qs. Sd. per ell,
but was now sold at 4*. ^d. sterling ^ In 1687 the output was again
increased by the erection of a large twisting-milP, but against this is
to be set the fact that the attempt to produce machine-made stockings
had yielded little or no profit, and the frames were ordered to be sold
by public roup^^

1 liecords of a ^Scottish Cloth Manufactory, § 797. ^ Ibid., § 828.

^ Ibid., § 988. ^ Dictionary of Legal Decisions, p. 12,614.

^ Records of a Scottish Cloth Manufactory, § 1211. ^ Ibid., § 1320.

' Ibid., ^ 1139. 8 ji)ici^^ § 1030. '^ Ibid., § 1007. ^^ Ibid., § 1122.

™

150 The Newmills Cloth Manufactory [div. ix. §

With the Revolution there came a temporary set-back in the
progress of the company. During the unsettled times before the
government of William III. was fully established, foreign cloth was
again imported with very little hindrance. Such importation was tacitly
recognized by an act of Parliament of 1690 which granted the magis-
trates of Edinburgh an impost of 12,y. Scots per ell on imported English
or foreign clothe In 1693 the company was incorporated by act of
Parliament under the title of the Incorporation of the Woollen Manu-
factory at Newmills in the Shire of Haddington. This act recites that
the undertaking had been subject to many discouragements and confirms
the privileges of the act of 1681, and in addition confers exemption
from customs for twenty-one years. It was also provided that an entry
in the books kept in Edinburgh and in London should be sufficient
evidence of ownership of shares^. By another act of the same year it
was provided that the army should wear cloth made in Scotland, under
similar conditions to those laid down by the Privy Council in 1685 ^
In 1695 the company was exempted from taxation ^

Since the Revolution the stringent legislation against the import of
foreign cloth and the export of Scottish wool, though not repealed,
had come to be neglected. It may have been that the government felt
that after nearly ten years of protection the Newmills company and
other makers of fine cloth should be able to face foreign competition,
but it is more probable that during the change of administration it was
inconvenient to enforce these laws. Opinions as to the effect of the
relaxation of protection were biased according to the interests of the
persons who expressed them. It appears that the export of manu-
factured cloth had fallen very seriously. In 1674, 400,000 ells of
plaiding had been exported from Aberdeen, and in the year 1694-5
the quantity for the same district had fallen to 80,000 ells. The price
realized too was lower, owing to the fact that the best wool was
exported and the home manufacturers were left with the refuse. There-
fore both the quantity and quality of cloth produced had declined^.
Arguments of this nature had weight with the Parliamentary Com-
mittee of Trade, and it was resolved to encourage a number of industries,
including the Newmills manufactory. A note was appended to the
resolution stating that the persons concerned in that manufacture had
permission to bring in such acts as they thought fit^. At first it was
proposed that the duty on imported cloth should be increased by

^ Acts of the Parliaments of Scotland, ix. p. 206.

2 lUd., IX. p. 818. 3 11^^^^ IX. p. 319. 4 /6jflf.^ IX. p. 371.

^ Parliamentary Papers, 1702 — Memorial concerning the State of Manufactures
before and since the year 1700.

'^ Parliamentary Papers, circa 1695 — List of Acts to be desired.

Div. IX. § 4 a] The Retur7i to Prohibition 1690-9 151

12*. Scots, and that on serges by 6s. Scots ^ but the manufacturers were
still anxious to obtain a complete prohibition of imports. Accordingly,
on October 8th, 1696, the Newmills company presented a petition
stating that " the undertakers had advanced to that perfection that
they were able not only to make woollen cloth as good as is made in
any other nation but also in such quantities as may serve the kingdom
and all ranks and degrees of persons within the same." It was pointed
out that the act of 1681 prohibiting foreign cloth, as well as subsequent
confirmatory acts of the Privy Council and the Lords of the Exchequer,
had never been expressly rescinded. But an " allowance or practice ""^ of
importing foreign cloth had come into vogue "to the great discouragement
of the company." It is therefore asked that the act of 1681 should be
revived, especially as the company was prepared to be inspected by the
Privy Council " and at their sight to make sufficient quantities of cloth
and at reasonable rates for serving the whole kingdom, which was never
formerly offered by any other manufacturer in this nation^." The
petition was remitted to the Committee of Trade to bring in an act,
and the draft act was read a first time on October 8th ^. On August 4th,
1698, the Committee of Trade adopted the view that the importation
of foreign cloth was a great discouragement to the existing manu-
factories, and the prohibition of imports of it was recommended^
Accordingly, overtures for acts, prohibiting the importation of cloth
and the exportation of wool as well as for encouraging the woollen
manufacture, were presented to Parliaments Meanwhile the strength
of the opposition to the existing state of affairs was increased by the
foundation of several other woollen works, and finally in June 1699
the exportation of woollen yarn was prohibited by an act of the
Privy Councils Gradually the policy of a return to prohibition was
making headway. It was believed that one reason of the decrease in
exports was the deficient quality of the cloth exported. One writer
stating that a thousand times as much could be sold abroad if it were
rightly made''. Accordingly an overture for an act for measuring and
sealing linen and woollen cloth came before Parliament in 1700, which
proposed that all pieces of cloth should be of equal length, consisting

^ Acts of the Parliaments of Scotland, ix. p. 460.

2 Parliamentary Papers, Oct. 8, 1G96— Petition of the woollen manufactory at
Newmills anent the import of foreign cloth.

3 Acts of the Parliaments of Scotland, x. p. 67.

* Parliamentary Papers, 1698— Minutes of the Committee of Trade.

° Parliamentary Papers, 1698— Overtures for Trade ; Acts of the Parliaments of
Scotland, x. pp. 146, 147.

^ Parliamentary Papers, 1701 — Exporting of wool.

^ A Scheme of Scotland's product and manufactures, p. 20 [Advocates' Library,
Pamphlets].

152 The Newmills Cloth Mamifactory [div. ix. § 4 Ai

of a definite number of ells^! No cloth could be legally sold unless it
was sealed by the official sealmaster, who was bound to seal only such
cloth as was declared to be made at home. As in the act of 1685
in favour of the Newmills company, the sealmaster had the right of
administering an oath, and he could compel persons, bringing cloth
to be sealed, to declare the name of the weaver and his place of
residence. Cloth, not distinguishable from that made abroad, was
subject to forfeiture ^ In 1701 the manufacturers addressed a petition
to Parliament against the continued export of wool. They stated that
the woollen industry at one time employed 50,000 persons and produced
,^10,000 sterling a year and it is now in danger of being destroyed.
Exports had ceased to be profitable, indeed those made recently had not
realized half the prime cost^. Prior to the export of wool, manu-
factured cloths and stockings had been sent abroad from " the north
country and Stirling," but at this date the trade had ceased and the goods
were rotting. A class of cloth, known as " Galloway whites,''"' had at
one time been sold abroad in large quantities. This continued till
sheep skins began to be exported, and now not a single pack of Galloway
whites was shipped ^ This and other representations at length had
weight with Parliament, and in 1701 an act was passed confirming the
previous prohibitions of the wearing or importing of foreign cloth as well
as the export of yarn. The chief addition to the previous acts of the
Privy Council was the provision that, instead of any cloth seized under
the act being destroyed, it was now to become the property of the
informer, on condition that he gave security to export it within six
months ^

The passing of this act ended for a time the more pressing difficulties
of the cloth manufacturer. How far the Newmills company had
suffered from the neglect of the act of 1681 between 1689 and 1701
it is difficult to determine. Curiously enough the first series of the
minutes ends about the earlier date and the second part only begins at
the later one. On June 4th, 1701, it is recorded that in 1699 certain
of the salaries at Newmills had been reduced owing to " the work being
low^," and in the petition presented to Parliament in 1696 the company

1 Parliamentary Papers^ 1700— The number of ells in the piece is left blank.

2 Parliamentary Papers^ 1700— Overture for an Act for measuring and sealing
of linnen cloth ; Acts of the Parliaments of Scotland , x. App. p. 228.

^ This statement is confirmed by the second series of the minutes, whence it
appears that cloth sent to Holland for sale there was returned unsold (November 4,
1702, Records of a Scottish Cloth Manufactory, p. 327); Scotland's Interest: Or the
Benefit and Necessity of a Communication of Trade with England, 1704, pp. 5, (j.

4 Parliamentary Papers, 1701 — Reasons against Act allowing the export of wool.

^ Acts of the Parliaments of Scotland, xi. p. 190.

^ Records qf a Scottish Cloth Manufactory, p. 2.56.

Div. IX. § 4 a] Profits in the Cloth Trade 1689-1703 153

stated that it had suffered great discouragement. Probably the least
reliable information as to the financial condition of any undertaking
would be its own account, given either to servants when their wages
were to be revised or to Parliament when further encouragement was
to be sought. No doubt the conflicting practices of customs-officials
must have been very perplexing, and a complete system of non-prohibited
imports of cloth would have been better than one under which English
and foreign cloth was sometimes admitted, sometimes stopped. This
must have meant a very serious inconvenience to the manufacturer, and
the Newmills company, besides, had now to face the competition of
other Scottish companies. The very fact that so many of these had
been founded before 1701 affords indirect evidence that the cloth trade
was considered to have favourable prospects, even before the legislation
of that year. This conclusion is confirmed by a comparison of the later
with the earlier Newmills minutes. The volume, beginning in 1701,
shows that the business had grown during the interval. The capital
had been increased, the quantity of cloth made was greater and the
purchases of wool were larger. Besides it happens there is record of a
transaction that gives some information as to the dividends actually
declared. By January 20th, 1703, it would appear that the four
previous dividends had amounted to 13, 10, 11, and 18 per cent,
respectively or a total of 52 per cent.^ This clearly shows that even
before 1701 considerable profits were made.

Despite the competition of younger undertakings, the Newmills
company seems to have held its own. By its constitution it dealt
directly with the leading cloth merchants, and these, being members of
the company, secured it a respectable sale of its goods. Then, too, it
continued to obtain a share of the government contracts for cloth.
But the great difficulty the business had to contend with at this date
was the stringency of the local money-market. Debtors paid very
slowly, the exchange abroad was adverse, and even the government
owed the sum of <^1,952. 14*. M. sterling for over ten years to the
managers, this sum being about 20 per cent, on the issued capital 2.
The State in other respects continued to support the company by
granting exemption from taxation. Thus in 1702, in the act levying
a ten and a half months' cess on land-rent, " the lands of Newmills
belonging to the woollen manufactory" are excepted, and a similar

1 Tliere is some doubt as to the dividend of 13 per cent., but the others are
mentioned in the minutes, vide Records of a Scottish Cloth Manufactory, pp. 336, 337
note.

2 Collection of Petitions to the Barons of the Exchequer (University Library,
Edinburgh, Laing MSS., No. 488, Div. ii. )— Petition of the managers of the manu-
factory at Newmills (1701).

154 The Newmills Cloth Manufactory [div. ix. § 4 a

privilege is recorded in the act of 1704 for a six months' cess, also in that
of 1705 for a seven months' cess^

One effect of the act of 1701 is said to have been towards increasing
the amount of cloth exported, which had grown from 80,000 ells in
1694-5 to 200,000 ells in 1702-3, from the same district 2. The balance
of opinion was favourable to the quality of cloth made at this period.
One writer says that the cloth industry had, by 1700, arrived at
" a very good degree of perfection,'' adding that " it is not to be
expected that a child new-born should do all things as a man of perfect
age, and therefore we are bound to have patience and cherish children
till they attain to vigour so as to serve us — and so we must do with
our manufactures ^" Another author is of opinion that " woollen-cloth
is now made as good as may serve the uses of the country^. Others
were convinced that the industry had progressed far beyond what could
have been expected in the comparatively short time since its inception ^
In other quarters the judgment was far from being so decisive. The
propounder of Reasons general for a Sumptuary Law held that "Scots
manufactures are so little specious when compared to the gaudy im-
ports, that what is manufactured in Scotland will not be used but
contemned by the vain — and that is (in experience) almost alP." The
minutes of the company show that, through laxity at the works, there
was considerable cause for complaint. In 1702 "scrimp" measure had
created " a great deall of clamour and trouble," and in the following
year there was much annoyance through the ill-milling of the cloth,
which was said to be "full of holes^." Though the prohibition of 1701
was received at first " with much popular applause and alacrity," it was
not long before there was dissatisfaction because every man did not
immediately experience the advantage he would gain^ In all proba-
bility, in view of the reduction of prices from 1695 to 1700, the plain
man would need much argument to convince him of the benefit he
would derive from any increase that might be made, on the return
to complete protection. At the same time it is worthy of note that it

1 Acts of the Parliaments of Scotland, xi. pp. 21 _, 138^ 296.

2 Parliamentary Papers, 1702 — Memorial concerning the State of Manufactures
before and since the year 1702.

^ A Letter to a Member of Parliament, Edinburgh _, 1700, p. 16.

* MS. Discourses anent the improvements may be made in Scotland [Advocates*
Library, Wodrow MSS., 33. 5. 16], f. 15.

^ Parliamentary Papers after 1702 — Answers to a memorial given in by the
merchant-tailors.

^ Parliamentary Papers, 1698.

^ Records of a Scottish Cloth Manufactory, pp. 322, 344.

8 A Speech without Doors concerning the Eocportation of Wool, Edinburgh, 1700,
p. 8.

IV. IX. § 4 a] The Wool and Cloth Trades 1700-4 155

is recorded after 1700 that the tendency on the whole was towards lower
prices for clothe

From the beginning of the eighteenth century to the Union, the
history of the Newmills company is embraced in the wider movement
of the legislation affecting wool. In 1703 two draft acts were brought
before Parliament, the one for the measurement and sealing of cloth and
the other to prohibit the importation of foreign wool 2. Against these,
an overture for an act was considered which provided for the encourage-
ment of woollen manufactories'^. Such overtures represented the struggle
between the manufacturing and land-owning interests. The prosperity
of the proprietors of Galloway and Roxburgh largely depended on the
prices realized for wool, and freedom of exporting meant a high return
as against a low one when the wool must be consumed at homel From
the point of view of the manufacturer the prohibition of the export of
wool was a necessity not only to provide him with cheap raw material
but also to limit the supply of wool available for the foreign producers
with whom he must compete if he exported his cloth.

The wool-masters secured a small advantage by endeavouring to
obtain permission to export sheepskins with the wool on them^ The
manufacturers presented a petition showing that the proposed act meant
the re-introduction of the export of wool^, and they were joined by the
skinners and shoemakers. However, the export of skins was permitted
under the condition that shipments should be limited to Borrowstounness,
Port-Glasgow and Dumfries ^ In 1704 the case of the wool-masters was
carried a stage further by the promotion of a draft act allowing the
export of wool. Against this the manufacturers were heard before
Parliament. They represented that " on the faith of former laws, which
were even but temporary, they erected manufactories at great charge,
and now to bring in an act which entirely overturns them seems to
be a hardship the like whereof has been unprecedented I"" There was
considerable debate on the clauses of the act, which was finally passed
in the form of allowing export of wool, while the prohibition of the im-
portation of cloth was again re-enacted ^ At the same time the export

1 Parliamentary Papers after 1702— Memorial concerning the State of Manu-
factures before and since the year 1700.

2 Acts of the Parliaments of Scotland, xi. pp. 46, 80, 81.

3 Ibid., p. 63.

4 The History of the Union of Great Britain, hy Daniel Defoe, Edin. 1709, p. 123.
^ Acts of the Parliaments of Scotland, xi. p. 111.

6 Parliamentary Papers, 1703 — Export of Skins.
^ Acts of the Parliaments of Scotland, xi. p. 111.

8 Parliamentary Papers, 1704— Tlie Petition of the Manufacturers of this King-
dom against permission to export wool ; Acts of the Parliaments of Scotland, xi. p. 177-
^ Acts of the Parliaments of Scotland, xi. p. 190.

156 The Newmills Cloth Manufactory [div. ix. § 4a

of Scottish cloth was exempted from duty, and this was recognized as
some compensation to the manufacturer \

These acts constituted a complete triumph to the wool-masters, and
at the same time a very serious blow to the undertakers of woollen
works. According to Defoe, " the shipping off of the wool from
Scotland... was a mortal wound given to the industry of the people,
discouraging all attempts of manufacturing among them.'*'' The re-
commencement of the exportation of wool was coincident with the
cessation of the exportation of cloth to Sweden and the Baltic, for " the
Swedes now took their wool from Scotland which they had not been
used to do, by which it was apparent, they (having the wool) made the
manufactures themselves, and this was a dead loss to Scotland just so
much as the employment and labour of the poor amounted to I"

These events were unfortunate for Scotland when commercial relations
with England came to be adjusted at the Union. For many years past
it had been the fixed policy of England to discourage the cloth trade
elsewhere and concentrate it at home. For instance, in 1698, the House
of Commons, noticing the growth of the woollen trade in Ireland, stated
in a petition to the king, that " it behoves them like their ancestors
to be jealous of the establishment and increase of this trade elsewhere^."
Accordingly, by a King^s letter, the government in Ireland was directed
to discourage the woollen trade and encourage the manufacture of linen''.
The same policy was now to be applied to Scotland, but with this differ-
ence, that Scotland was in a stronger position than Ireland had been in
bargaining for compensation in respect of losses through the abandon-
ment of the fine cloth trade. England, in conformity with a definite
policy, required the prohibition of the export of wool, and therefore
some compensation was awarded to the wool-masters, affected by the
change, through subsidies to the manufacture of coarse cloth. It was
widely felt that there was a hardship to Scottish producers in the
destruction of the fine cloth works already established. For, with
freedom of trade between the two countries, English cloth ceased to
be prohibited, and it was sold at much lower prices than the home
product^. At the same time it must be remembered that Scotland

1 Acts of the Parliaments of l^cotland, xi. App. p. 53.

^ History of the Union, ut supra, p. 123.

'^ Vide supra, p. 102.

* State Papers — Public Record Office, DubHii, King's and Queen's Letters, under
July 7, 1698 ; Carton 178, No. 3779.

" Defoe, History of the Union, ut supra. Appendix, Part i. p. 36. This is con-
firmed by Adam Smith ( Wealth of Nations, Book i. ch. xi. ed. Nicholson, p. 99),
who states that the price of wool fell '' very considerably " after the Union. ITie
loss to the land-owners, he adds, was made good by a rise in the price of meat.
William Paterson in 1706 mentioned the cloth trade as one of those which was

Div. IX. § 4 a] The Cloth Trade and the Union 1707 157

could only be compensated once for the same thing. Granting the
export of wool, for the cessation of which compensation was given, it
was impossible that allowance should be made for the loss of protection
to the fine cloth manufacture, for this trade had already been very
seriously endangered by the same permission of freedom of exporting
wool. In fact there were, up till 1704, two avenues possible for a claim
for compensation. One was the continuation of the prohibition of the
export of wool, in which case there would have been grounds in equity
for allowances to be made to the manufacturers of broadcloth for the
loss of protection against English imports. In view of the anxiety of
England to secure the cloth trade, it is possible the Scottish position, in
bargaining on the terms of the Union, would have been stronger on this
than on the grounds that had to be taken up, namely, the loss of the
right to export wooP.

After the Union some of the early manufactories turned their
attention to the production of inferior cloth, and petitions were pre-
sented from Wm. Hogg of Harcarse and the Musselburgh company,
making certain offers in return for grants from the Equivalents The
Newmills company does not appear to have made any attempt to adapt
itself to the changed circumstances, and preparations were made for the
winding up of the company. The necessary steps could only be made
very slowly, as there was difficulty in obtaining payment of some long
outstanding accounts due by the government for army clothing S At a
meeting held towards the end of February 1711 it was decided to accept
proposals from intending purchasers of the lands of Newmills, the dead
stock and privileges of the company^ Meetings of the members were
called for the 3rd of June, the 11th of June, and the 28th of June of
the same year^. In February 1712 the property was again advertized
for sale with the hall of the company in Edinburgh I Early in May it
was announced that the sale had been adjourned ^ Evidently there
was important business for which it was difficult to obtain a quorum,
for, during the last days of October an advertisement was published
to the effect that " the proprietors of the Newmills Manufactory are
entreated to meet at their hall on Monday November 3rd at 2 o'c.

likely to gain by the Union {An Enquiry into the Reasonableness and Consequences of
an Union with Scotland, 1706, p. 123).

1 Some particulars of the general effects of the Scottish protective policy are
given in an article on this subject in The Scottish Historical lieview (January 1904),
I. pp. 173-90.

2 A Collection of Petitions to the Barons of the Exchequer (University Library,
Edinburgh, Laing MSS., No. 488, Div. ii.).

2 The Dictionary of Legal Decisions, p. 1400.

* The Scots Courant, Nos. 853, 880. ^ J bid., Nos. 894, 895, 981.

6 Ibid., No. 1010. 7 ji,id,^ No. 1041.

158 The NewmilU Cloth Manufactory [div. ix. § 4 a

in the afternoon anent special affairs of the company ^'*'' As a result
of this meeting it was decided to offer the property in separate lots,
and, in the next issue of the Scots Coura7it, the lands of Newmills were
advertized for public sale, and "the proprietors were entreated to be
present at the roup^ " on December 1st at S o''clock. The hall was
to be rouped on the 8th, but subsequently the sale was adjourned to
February 16th, 1713^ Just before the sale of the hall, a drawing of
the remaining cloth by lot was held on February 2nd^. Last of all,
on March 20th, the machinery and plant were sold. It comprised tools
for the manufacture of broadcloth, " such as shifFers, cards, hand-stocks
with and without teasels, weavers'-looms, spinning-wheels, weavers'-
shuttles, weavers' reeds, reels, sheer-boards and dubbing boards, brushes,
burling tables, tenters, iron stove, two hot presses, one cold press, press-
ing planks, pressing papers, also Spanish wool dyed several mixtures^'"*

The lands of Newmills were purchased by Colonel Charteris and he
changed the name to Amisfield, so that, with the winding-up of the
company, the designation of its property disappeared.

B. Other Woollen Manufactories.

Woollen Manufacture at Glasgow (James Armour), 1683.

Woollen Manufacture at Paul's Work, Edinburgh, 1683-
1708.

Woollen Manufacture at Musselburgh, (?) 1695.

Woollen Manufacture at Aberdeen, 1696.

The Woollen Manufacture of Glasgow (Wm. Cochrane),
1699.

Woollen and Linen Manufactory of John Corse, Glasgow,
1700.

William Hog's Manufacture, (?) 1702-3.

The Woollen Manufacture of North-Mills, Aberdeen-
shire (Wm. Black), 1703.

Lyell's Manufactory at Gairdin, 1704.

In addition to the Newmills company, there was a large number
of other cloth works, some of them of considerable importance. In
fact, owing to the advantages given by the act of 1681 for encouraging
trade and manufactures, as well as the special privileges obtained by the

1 The Scots Gourant, No. 1112. 2 n^i^^ No. 1118.

3 Ibid., No. 1147. * Ibid., No. 1145. ^ Ibid., No. 1166.

Div. ix.§4b] Glasgow & Edinburgh Cloth Cos. 1683-1708 159

Newmills company, people had turned their minds and stocks by prefer-
ence towards the woollen traded In 1683, the privileges of a manu-
facture were granted to the undertaking of James Armour at Glasgow,
which was intended to produce serges and other kinds of cloth I There
is no record as to the success or failure of this venture, but it would
appear that it did not ruin the promoter, as a James Armour, of
Glasgow, was associated with Chamberlain in the proposal for establish-
ing a Land Bank ^

In 1683, the privileges of a manufacture were granted to a broadcloth
manufactory at Paul's Work, in Edinburgh, which had already been in
operation. This undertaking had been established by a partnership
of several persons, and evidence was produced before the Privy Council
to show that the whole process from the purchase of the rough wool,
including dyeing and mixing, up to the delivery of broadcloth was
performed in the factory and that the cloth had gained the approval
of the merchants of Edinburgh "*. It is by no means easy to differentiate
this company from the Scots Linen Manufacture, which also had build-
ings at PauFs Work^ The company of 1683 is said to have made
linens as well as cloth ^, and, therefore, when Dupin was forming his
linen company in 1690, he may either have acquired the premises of the
older concern, or again, the two businesses may have co-existed side by
side — the address of each being " PauPs Work."'"' On the whole, it seems
that the advertisement quoted below'', with reference to the sale or
feuing of PauFs Work, related to this rather than to the buildings
occupied by the Linen company, because, in the description, there is
no reference to linen, and there is mention of the Bonnington Mills,
which had long been used for the production of cloth. The undertaking
offered for sale in 1708 had a subsidy from the Town Council of Edin-
burgh for the teaching of apprentices — a kind of grant given to many
of the woollen factories.

For over ten years, no records of new cloth works have come to light.
The reason for this, as well as the starting of numerous undertakings
from 1695 to 1705, is to be found in the attitude of the State to the
importation of foreign cloth and the exportation of wool^ As soon
as there were grounds to expect that a return would be made to the

* Parliamentary Papers, 1702 — Memorial coiiceriiiiig the State of Manufactures
before and since the year 1700.

^ Acts of the Parliaments of Scotland, viii. p. 361.
3 Vide infra, Division x., Section 3.

* Decreta of Privy Council of Scotland, f. 181.
^ Vide infra, Division ix.. Section 4c.

^ Warden, Linen Trade, p. 428.

7 Vide infra, p. 169. * Vide supra, pp. 153-5.

160 The Glasgow Cloth Manufactory 1699 [div. ix. §4b

protectionist policy in vogue from 1681 to 1685, new woollen companies
began to be created. Works had been established at Musselburgh, by
a Gilbert Robertson, of Whitehouse, who, in 1695, petitioned Parlia-
ment for the same privileges that had been granted to the Newmills
company. He stated that he had been very well encouraged by the
success of his labour, and was resolved to extend his works by assuming
others in partnership ^ In 1703, the same request was again preferred,
and by that time the undertaking had grown. " Many hundreds " of
work-people were employed"^, and, by the inclusion of a number of
partners, a considerable stock had been adventured^.

In 1696, a company, consisting of a moderately large membership,
was established in the city of Aberdeen ^

An influential company was formed in Glasgow in 1699, consisting
of ten persons, including William Dunlop, principal of the University ;
Mungo Cochrane, a distiller; and several ship-owners. It proposed "to
make woollen stuffs of all sorts, such as damasks, half-silks, draughts,
friezes, drogats, tartans, craips, capitations, russets, and all other stuffs
for men and women's apparel, either in summer or winter."*"* It was
expected that this varied assortment of products could be sold "at
an easie rate,"*' and, to secure a high standard of workmanship, "able
artists " had been brought from abroad. The company sought special
consideration from the Privy Council in view of the fact that =^10,000
sterling was annually paid to Ireland from the south and west of
Scotland for woollen goods, which would now be made at home**. A
similar petition was presented to Parliament for the privileges of a
manufacture, under the act of 1681 **. This company soon made rapid
progress, and about the year 1700 it employed 1,400 persons, this being
the largest number recorded as receiving wages simultaneously from any
one firm''. In 1704, this company took the lead, as the premier cloth
factory, in petitioning Parliament for a more liberal policy towards the
manufacturers^. From 1704, there is no further mention of this under-
taking; as already shown, being a producer of fine woollen goods, it
would have suffered by the Union, and when later efforts were made

^ Parliamentary Papers, 1695 — The Petition of G. Robertson.

2 Parliamentary Papers, 1702 — Memorial concerning the State of Manufactures]
before and since the year 1700.

3 Acts of the Parliaments of Scotland, xi. p. 81.
* Chambers, Domestic Annals of Scotland, iii. p. 155.
s Ihid., III. pp. 126, 127.

^ Parliamentary Papers, undated — The Petition of William Cochrane.
5" Parliamentary Papers, 1702 — Memorial concerning the State of Manufactures

before and since the year 1700.

^ Parliamentary Papers, 1704 — Proposals in favour of the Woollen Manu-
factories and particularly that of Glasgow.

Div. IX. § 4b] Relations between Cloth Cos. 1701-3 161

to start the industry again in Glasgow, such efforts were regarded as
founding the trade anew. Another woollen factory, which had a branch
for making linen, was started in 1700 by John Corset

The second series of the minutes of the Newmills company, which
begins in 1701, presents some interesting side-lights on the condition of
other cloth factories. Mention is there made of the more important
of the contemporary undertakings, namely the Musselburgh, the Glasgow,
and Paul's Work companies. Another business, established at Hamilton,
is also referred to. The relations between these different factories were
partly harmonious, partly antagonistic. After the act of 1701, pro-
hibiting the export of wool, joint action was taken by the Newmills and
PauPs Work companies to convict persons evading this enactment 2. It
appears, too, that improved technical processes were communicated by
the Musselburgh to the Newmills company^. The chief occasion of
friction arose out of the acts giving the owners of factories extensive
powers over servants they brought into the country. The Newmills
company several times complained of "the running away" of skilled
hands to other cloth works, and the measures taken for the recovery
of the fugitives are recorded*.

Besides the works already mentioned, there were some others founded
in the early years of the eighteenth century. One was owned by William
Hog, of Harcarse, in Berwickshire, which had the unique distinction of
surviving the Union ^ The methods of managing Gordon's mill, near
Aberdeen, which was known as the manufactory of North-Mills, are of
considerable interest. The proprietor, an advocate, named William
Black, stated that his servants, who were highly trained, were bound
to work for any one who would employ them, and work only for their
master " when they have nothing else to do — yea, when any work comes
from the country, his is laid aside." This was the only method by which
Scots manufactures could be obtained at reasonable prices ! One is not
surprised to find Black was not in any society, as he explains it, because
the partners " would not so unanimously agree in running such hazards."
In the study of Parliamentary petitions, one comes to expect that the
amount demanded at the close will be in proportion to the benevolence
in the preamble, and the present is a case in point. Black asked the
privilege of a manufacture, and, in addition, parallel grants to those

^ Acts of the Parliaments of Scotland , x. App. p. 56.

2 Records of a Scottish Cloth Manufactory, p. 274. There is another reference to
the Paul's Work as late as January 20th, 1703, when the master became security
for a purchaser of cloth from the Newmills company. This entry is in the statistical
matter, which is not included in the printed copy.

3 Ibid., p. 238. * Ibid., pp. 225, 234, 264, 268.

5 Collection of Petitions to the Barons of the Exchequer, ut *M/)m— Proposals
of William Hog (dated January, 1709).

S. C. III. 11

162 Cloth Works of Blade and Lyell 1696 [div. ix. § 4 b

enjoyed by the Newmills company, with the very important further
requirement of Parliamentary sanction for the county raising any sum,
not exceeding a week's cess, to be paid to Black for maintaining and
teaching apprentices. Parliament granted one part of the petition,
namely, the privilege of a manufacture : the immunities granted New-
mills were refused to the North-Mills manufactory, and the Commissioners
of Supply for Aberdeenshire were authorized to raise ^^1,000 yearly for
five years to be paid Black for maintaining and teaching the trade to
boys from the county^.

James Lyell, of Gairdin, had obtained, in 1695, the privilege of a
manufacture for a process for extracting oil from seeds, and for the
preparation of hare and rabbit skins to be made into hats^. In 1704,
he petitioned Parliament for the same encouragement for his woollen
manufactory established at Gairdin, asking at the same time that
he should be allowed ,£^1,000 Scots a year to enable him to teach the
trade to poor boys. In support of his request, he stated that it
was well known that "joint-stocks and co-partneries were seldom or
never so sure, advantageous, and successful as the industry of private
persons who have sufficient stock and skill for carrying on such an
undertaking, and who, being encouraged to work for themselves, do not
only improve in the work but in a short time bring low the prices and
employ the poor^" Evidently, even in the first years of the eighteenth
century, the effect of pauper labour on prices had been felt.

C. The Scots Linen Manufacture (Incorporated by
ACT OF Parliament, 1693).

From a very early period rough linens had been made in Scotland.
Before the Restoration the methods of weaving were rude, and there
was no standard of quality or of the length of pieces. By an act
entitled, "an act discharging the exportation of linen yarn,'' passed in
the first Parliament of Charles II., yarn was to be sold by weight,
bleaching by lime was forbidden, and all linens were to be of a certain sizeji
according to their price. By the act of 1681 for encouraging trade and
manufactures, the importation of foreign linens was prohibited. Up to
1681 there had been a considerable trade in linen with the north of

^ Acts of the Parliaments of Scotland, xi. pp. 81, 82. William Black was the
author of The Privileges of the Royal Burrows, as contained in their particular Eights,,^
and the Ancient Laws and Records of Parliament and their General Conventions^
Edinburgh, 1707, and other tracts.

^ Acts of the Parliaments of Scotland, ix. p. 420.

3 Parliamentary Papers, 1704 — The Petition of James Lyell of Gairdin.

Div. IX. § 4 c] The Linen Trade in Scotland 1680-91 163

England — indeed, the home and foreign trade at this time was sufficient
to employ about 12,000 persons in the spinning of flax. The English,
being prevented from exporting both cloth and linen into Scotland,
adopted retaliatory measures, and, as stated in a petition to the Privy
Council in 1684, Scotsmen selling linens in England had been whipped
as criminals and compelled to give security to discontinue the traffic.
The Council recommended the Secretary of State to intercede with the
King, in order that the Scots merchants might have liberty to sell their
goods in England^ In 1686 it was ordained by act of Parliament that
dead bodies should be buried only in Scots linen, and infraction of the
law was visited with heavy penalties I This act was ratified in 1693
and 1695. About this time a number of French refugees, who were
expert linen weavers, arrived in Scotland and settled in Edinburgh,
near the head of Leith Walk, which was long afterwards known as Little
Picardy^

After the Revolution an attempt was made to introduce capital and
improved methods by Nicholas Dupin, who had been instrumental in
founding the King's and Queen's Linen corporations, both in England
and Ireland. In the latter countries he had obtained patents granting
the exclusive right of using certain new or foreign processes, and in
each case the shares stood at considerable premiums for some time. It
was unlikely that so astute an entrepreneur as Dupin, who could control
considerable resources, would leave such a promising field as Scotland
untouched; and accordingly, in 1691, he had secured the promise of a
patent for Scotland, similar to those he had already obtained for England
and Ireland. The matter came before the Convention of Royal Burghs
in the following October, and evidently the proposed monopoly, as well
as the introduction of English capital, excited no little dismay. The
Convention summoned a special meeting to consider the grant, and in
the meantime it entreated the King that nothing further be concluded
in the matter 1 After the Committee had reported, the Convention
declared that no more was necessary to improve the industry than to
enforce the existing laws, because the reputation of the nation had
suffered greatly abroad through the "irregularity and insufficiency of
the linens exported ^'' Apparently no notice was taken of this suggestion,
and in July, 1692, it was declared that the proposed company threatened
to prejudice the state of the Royal Burghs, and that the adjustment of

1 Acts of the Parliaments of Scotland, vii. pp. 465, 466; History of Civilization in
Scotland, by John Macintosh, iii. p. 311.

2 Acts of the Parliaments of Scotland, viii. p. 598.

3 The Huguenots, by Samuel Smiles, London, 1867, p. 338.

* Records of the Convention of the Royal Burghs, 1677-1711, p. 146.
5 Ihid., p. 148.

11—2

164 The Scots Linen Manufacture [div. ix. § 4 c

the difficulty required the wisdom of Parliaments At the same time a
direct appeal was made to the King, and it was urged that the proposed
company would ruin the Royal Burghs I To this the King replied that
he would not grant any patents or " erections " to the prejudice or
monopolizing of the trade or manufactures of his ancient kingdom of
Scotland ^ So far the Burghs had impeded Dupin's enterprize, and at
first sight it would appear they had right completely on their side. It
is to be remembered, however, that the monopoly Dupin's corporations
had acquired in England and Ireland was not for the linen trade as a
whole, but rather for certain kinds of fine spinning and damask-
weaving^; and though there appears to be no copy of the proposed
patent for Scotland in existence, in all probability the privileges would
be the same. As these were new processes in that country, he had a
right to a certain measure of protection, though the perpetual monopoly
of the specified processes erred on the side of generosity to the in-
ventor. The real reason of the opposition of the Burghs was the long-
standing difficulty, which had descended from the gild-merchant, in
reference to trading relations between free men and those not free of a
Royal Burgh. This occasioned much trouble to the Newmills woollen
manufactory, and was probably the reason of the peculiar manner in
which its output was distributed ^

Dupin had not waited for the signing of his patent, but had already
acquired an interest in suitable works. It would appear that the looms
were established in a tenement known as PauFs Work at the foot of
the Leith Wynd in Edinburgh. As early as 1609 there had been an
attempt to establish a cloth factory at the same place ^, and in 1681
the works were again started, and the privilege of a manufacture granted
the proprietors for the linen and woollen industry''. Other works had
also been acquired at the citadel of Leith, and by 1693 about 700
persons were employed, and, according to the account of the owners,
the linens produced far exceeded in quality those made in England or
Ireland^.

Up to 1693 the undertaking had been financed by the English

^ Records of the Convention of the Royal Burghs, 1677-1711^ p. 164.
2 Ibid., p. 165.

^ Ibid., p. 168: cf. State Papers^ Domestic^ Warrant Book — Scotland, xv. p. 125.

^ Vide supra, pp. 91, 99.

^ A Representation of the Advantages... of erecting Manufactories, ut supra, also

supra, p. 142.

6 The Linen Trade, by Alex. J. Warden, London, 1854, p. 428.

7 Acts of the Privy Council, 1682-5 (under September 1, 1681)^ Chambers,
Domestic Annals of Scotland, ii. p. 427.

s Parliamentary Papers, 1693 —Memorandum anent the advancement of linenj
cloth, etc.

Div. IX. § 4 c] Scheme for Extension of the Works 1693 165

corporation, and the latter had now troubles of its own to face and
was unable to provide the capital needed. The pioneer company in
Scotland, without the protection of a patent or any other privileges,
could no longer pay its way ; and in a "memorandum anent the advance-
ment of linen cloth, being considerations on the profits that would arise
from the advancement of linen cloth, with a list of the acts and
privileges that would cause this Kingdom to flourish by that trade
alone," it is shown that, on the winding up of the company, the finer
work it had now begun to produce would be transplanted to Ireland ^
Whereas, if more capital were introduced and " with good wholesome
laws," for the encouragement of the shareholders, " the linens produced
would be cheaper than our neighbour nations to our advancement and
their discouragements" Probably Dupin had at one time intended the
English corporation to be the parent undertaking for the three kingdoms,
but already it was on the verge of failure — the shares having fallen
from 45 to 18 during this same year 1693S It may have occurred to
him, considering the natural advantages of Scotland for this industry, to
make the PauFs Work the chief factory in Britain. However this may
be, he suggested the formation of a new company on a very large scale,
with a capital of from .^£'20,000 to ^£^40,000 sterling, which should be
specially exempted from attachment from certain outstanding debts
already incurred*. Apparently the existing company was a direct
successor of the partnership of 1681, for it is also asked that the
period for freedom from taxes (which in that case would expire in
1700) should be prolongedS The places where food was supplied to the
work-people should be free of taxes also ; and, as in the case of the New-
mills company, any drink consumed by them from excise duties S The
laws regulating the quantity of linens should be enforced, and finally
the company asked to have a royalty of 2J. Scots on every ell of linen
sold in Scotland to maintain servants to measure, mark and seal it, and
" to give good example and instruction in every shire about the goodness
of if," whence it seems to follow that the competitors of the company
were to be taxed to advertize the product of their rivals !

On the recommendation of the Committee of Trade, Parliament
decided to encourage the company, and no less than three acts were
passed in June 1693 in its favour. With special reference to the
industry as a whole, all linens were to be of uniform size and quality,
and, as a guarantee of this provision being carried out, all pieces ex-
posed for sale must bear the seal of a Royal Burgh — the fee for sealing

1 Parliamentary Papers, 1693— Memorandum, ut supra, f. 7.

2 Ihid., f. 2. 3 Yide supra, p. 97.

* Parliamentary Papers, 1693— Memorandum, ut supra, ff. 5, 6.
fi Ibid., f. 7. « Ibid., f. 4. 7 Ibid., f. 8.

166 The Scots Linen Manufacture [div. ix. § 4o

being 8^. Scots per piece. Iii future, no yarn was to be exported, and
it must always be sold by weights By another act, the company
obtained the following privileges: it had the right (confined by the
previous act to the Royal Burghs) of affixing a seal to linens from its
looms, duties on its exports were remitted for twenty-one years, and all
drink consumed by the work-people was free of taxes. All the privileges
of the act of 1681 for encouraging trade and manufactures were also
granted. It was also enacted that the undertaking could not be wound
up without the consent of three-fourths of the shareholders, and that a
transfer in the books of the company was sufficient evidence of the
ownership of shares^. About the time this act was obtained, the shares
began to be dealt with in London, but no record of the prices realized
has been preserved^.

Dupin, in his "memorandum'' to the Committee of Trade, had
mentioned a capital of between ^20,000 and ^£^40,000 sterling as being
required. This was a much larger amount than that invested in the
Irish or English corporations, the initial capital of the former having
been ^2,000, and that of the latter £S,mO\ No doubt the great
premium, which was obtainable at one time on the shares of both under-
takings, as well as the eagerness of the public to take up a second
issue of the English body at <^50 for the d^lO share, suggested the idea
of floating the Scottish company with a relatively larger capital. But
in view of the very meagre amount of the resources of Scotland available
for investment, as shown by the difficulty Dupin found in obtaining even
a part of the ^4,000 required for the Scots Paper manufacture, as well
as the embarrassment of the English Linen corporation at this time, it
was only to be expected that very little of the total amount required
was subscribed. The issue of stock, however, was not a total failure,
for it is recorded that Sir John Foulis of Ravelston and members of
his family owned shares^, still there are reasons to believe that only a
small sum was provided, and the whole enterprize was, therefore, in

^ Acts of the Parliaments of Scotland, ix. pp. 311, 312.

2 Ihid., IX. p. 316.

3 Houghton, Collections, under May 16th, 1694. In this list {vide Plate, vol. i.)
the linen undertakings are printed as follows : —

Linen K. and Q.'s £9
Scotch
The price of shares in the latter is not recorded though Houghton offered that in
such cases any subscriber, who paid an extra subscription to his paper, could have
the prices filled in by hand. No numbers of the Collections, with these additions,
have been discovered.

* Vide supra, pp. 91, 100.

^ The Account Book of Sir John Foulis of Ravelston, edited by Rev. A. W. C.
Hallen (Scottish History Society), pp. 183, 222, 223.

Div. IX. § 4c] Shares offered to Royal Burghs 1694 167

danger of never obtaining a fair start; but, immediately it became
apparent that sufficient subscriptions would not be obtained, Dupin re-
opened negotiations with the Royal Burghs for financial assistance. On
the analogy of the constitution of the Dutch East India company, he
represented that a part of the capital required should be invested by the
Royal Burghs, a course which was rendered legal by the precedents for
municipal trading dating back to the time of Charles I. An agreement
was signed by the Royal Burghs on May 28th, 1694, which provided
that the capital of the company should be fixed at ^30,000 sterling,
divided into 6,000 shares of £5 each. On the lines of the Fishery
company established in the reign of Charles I., it was provided that half
the shares should be offisred for subscription in England, and that the
management should be divided between the subscribers of the two
countries equally \ The board was to consist of 30 assistants, from whom
the governor, deputy -governor, and treasurer were to be chosen^. The
voting rights were limited to one vote for every five shares, with the
proviso that no holding of shares entitled the owner to more than five
votes, or, in other words, any investment beyond £19.5 sterling had no
vote^ Shareholders were entitled to a separate certificate for each
share*. As in the White Paper manufacture, Dupin was to receive 8*.
per share, or 12 J per cent., for his eiForts prior to the incorporation of
the company ^

The Royal Burghs, as a whole, had not come forward to subscribe,
and in July few were interested in the company. The Convention,
after deliberation, recommended any burgh, interested in the linen
industry, to join Dupin's society^, so that it may be concluded that
only a small part of the total capital proposed was actually paid up.
Still, the increase to the resources of the undertaking was sufficient to
secure its financial stability for the time, and, in addition, to enable it
to acquire additional properties. In 1695 mention is made of works at
Logan's Close, in Leith, and of a bleaching ground at Corstorphinel
In the same year the Committee of Trade recommended Parliament to
encourage the company, and permission was given to bring in such an
act as would be beneficiaP. Accordingly the company framed an over-

1 Articles of Agreement made and agreed on this twenty-eighth day of May, in the
year of our Lord 1694, between the Royal Free Burrows ...of Scotland, who shall be
pleased to subscribe and be concerned in the Scots Linen Subscription Book for the Linen
Manufacture in that Kingdom on the one part, and Nicholas Dupin... in trust for the
members who shall be pleased to subscribe and be concerned in the aforesaid manufacture
in England, of the other part. Edinburgh, 1694, pp. 1, 2 ; vide supra, ii. p. 363.

2 Ibid., p. 5. 3 ihid,^ p. 13. 4 Ibid., p. 11. ^ Ibid., p. 12.
6 Records oj the Convention of Royal Burghs, 1677-1711, p. 194.

'' Acts of the Parliaments of Scotland, ix. p. 430.

5 Parliamentary Papers, circa 1695— List of Acts to be desired.

168 The Scots Linen Manufacture [div. ix. § 4c

ture for an act, which was passed in due course by Parliament, giving ™
the right (ah-eady granted by the Privy Council to the Newmills
company) of searching for and seizing linens not in conformity with the
act of 1693. The same measure extended the exemptions from excise to
the properties recently acquired by the company \

In spite of the right of seizure of imperfect linens granted by the
acts of 1693 and 1695, in 1698 the company complained to Parliament
that the true making of linen was not observed, and for this reason
Scottish linens were in disrepute abroad I By 1700 the acts for regu-
lating the quality of linens had ceased to be obeyed, and an overture
for a fresh enactment confirming previous legislation was introduced, but
it did not become law^. Opinions, expressed by apparently disinterested
persons on the quality of linen made in Scotland, were far from being
harmonious. A writer, comparing the state of manufactures at the
beginning of the eighteenth century with the same industries at an
earlier date, says that " all sorts of linens are now made finer, broader,
and in larger pieces*," and another describes the flax industry in
general terms as having arrived "at a very good degree of perfection ^^
There is, however, reason to believe these statements were too optimistic.
In 1704 it is noted that Scotsmen had found their linens " such a drug
on their hands that not a third part is sold of what was formerly,
and even that at so low a rate that what was before sold for 12<i. is now
sold at near a half under^.*" It was said in 1706, that, if Scottish linens
were rightly made, three times as much could be sold abroad^. Indeed,
there is an accumulation of evidence that fine linens were not produced
to any considerable extent in Scotland till after the Union. Not only
so, but owing to the continued export of defective, and it is to be feared
dishonestly described linens, there was a prejudice in foreign markets
against Scottish manufactures ^ These circumstances constituted a
serious handicap to the Scots Linen manufacture, for it could not
produce on a sufficiently large scale if it could not find a market abroad,
and it could not sell readily either abroad or in England, owing to

^ Acts of the Parliaments of Scotland, ix. p. 430.

2 lUd., X. App. p. 22.

2 Parliamentary Papers^ 1700 — Overture for an Act of Parliament for Measuring
and Sealing- of Linen and Woollen Cloth.

* MS. Discourses anent the improvements may be made in Scotland (Advocates'
Library, Wodrow MSS., 33. 5. 16), f. 15.

^ A Letter to a Member of Parliament. Edinburgh, 1704, p. 9.

*^ An Essay on Industry and Trade. Edinburgh, 1706, p. 10.

'' Scotland's Interest : Or the Great Benefit and Necessity of a Communication of
Trade with England, 1704, p. 5.

8 Similarly the Newmills company was unable, in 1701, to sell cloth it had
exported to Holland.

Div. IX. § 4c] Difficulties of the Linen Trade 1700-4 169

the prejudice against Scottish hnen. It was therefore to be expected
that the company could not continue to pay its way ; and it would appear
that, during the first few years of the eighteenth century, the under-
taking was wound up and the buildings let. An advertisement which
appeared in the Edinburgh Courant in August 1708 sets out that the
undertakers of the woollen manufactory at Paul's Work, at the foot of
Leith Wynd, with the several houses there and at Bonnington Mills, are
prepared to let these premises, together with " the money that is paid
.yearly by the good town of Edinburgh for the maintenance and teaching
of poor boys." This seems to apply to a woollen factory^ which was
situated near the property of this company. As late as 1713 an under-
taking, described as that at PauFs Work, was in a flourishing financial
condition as is shown by its being able to lend the City of Edinburgh
£9.^^QQQ. 13^. M. Scots at 5J per cent. This was the third largest loan
out of thirty-six, being exceeded only by those of the " College " and
the " Lords of Session-." On the whole it is probable that this was a
woollen manufactory, dealing with the coarser fabrics. Ten years before
this date the linen trade had suffered during the tension between
Scotland and England. The exportation of Scottish linens to England
was prohibited, together with that of a number of other commodities,
and it was estimated that the total annual loss, occasioned by this legis-
lation, was .^'l 20,000. In the course of a spirited protest, in which
retaliation was recommended, it was stated in 1705 that the chief seats
of the linen industry were then at Hamilton and Glasgow, so that
it may be inferred that, by this date, the Scots Linen manufacture
had been wound up^.

D. The Silk Manufactory (1697).

As early as 1682, an effort had been made to introduce the spinning
of silk into Scotland. In that year, a monopoly for seventeen years was
granted to George Sanders for a manufactory for the twisting and
throwing of all sorts of raw silk. Sanders having failed to succeed in
his undertaking, the Privy Council, on June 15th, 1697, authorized
Joseph Ormiston and William Elliot to set up a similar undertaking,
which was to have the privilege of a manufacture under the act of

^ Vide supra, p. 159.

2 " MS. List of the Town of Edinburgh's Creditors at Lambas, 1713 "—bound
up in "Edinburgh Tracts/' Univ. Lib. St Andrews, i. (1671-1799— CG. 3. 49).

3 The Accompt Current between Scotland and England, by J[ohn] S[puell], Edin-
burgh, 1706, pp. 1, 20.

170 The Silk Manufactory 1697-1701 [div. ix.

1681 \ In the year 1698, the promoters presented a petition to Parlia-
ment in which they stated that the enterprize had not as yet been
started, " because it is very obvious that except others had been disH
charged and debarred from setting up and prosecuting the same manu-
facture for a certain space of years, during which we might have
expected a reimbursement of our charges and expenses that usually
attend such an undertaking, your petitioners could not follow the said
act [of the Privy Council] without evidently hazarding the loss of our
stock, beside the disappointment of any small gain that might reason-
ably be expected by the undertakers of any such public work."" It was
added that though the Privy Council had granted the privilege of the
undertaking being a manufacture, it had been loth to give a monopoly,
that being more proper for Parliament. The signatories, therefore,
asked the sole privilege of a manufacture for winding, throwing, twist-
ing, and dyeing all sorts of raw and unwrought silks for themselves
and the partners they intended to assume^. This petition was considered
by Parliament, but the partnership was subjected to a peculiar species
of opposition. The tendency of the act of 1681 was not only to
encourage trade and manufactures but also to repress luxury by the
prohibition of the wearing of certain costly materials. These pro-
visions, like other clauses of the act, had ceased to be observed, and in
all probability they would have been forgotten had it not been that the
country was beginning to experience a scarcity of resources, which was
partly due to bad harvests and the payment of the capital subscribed
to the Darien company, partly also, but in a less degree, to investments
in new manufacturing enterprizes which as yet had yielded small
returns. Owing to the trend of opinion at the time, the want of
spending power was attributed to the growth of luxury, and there was
a marked tendency to revert to the enactment of sumptuary laws.
Accordingly, in 1698, an "act to regulate the wearing of silk stuffs"
was introduced, but it was ordered to lie on the table ^.

Though Ormiston and his partners had failed to secure a monopoly,
and though their projected enterprize was threatened by sumptuary
legislation, the scheme was proceeded with, and at the same time efforts
were made to secure other privileges. In 1700, an act was brought
before Parliament to prohibit the importation of foreign silk stuffs ;
and, after some exceptions had been made, it was passed in 1701*.

^ Acts of the Privy Council of Scotland. Chambers, Domestic Annals of Scot-
land, III. p. 155.

2 Parliamentary Papers, 1698 — The Petition of Joseph Ormiston and William
Elliot, Merchants, anent a Silk Manufactory.

3 Acts of the Parliaments of Scotland, x. p. 144.

4 Ibid., X. pp. 146, 147, 240, 280.

Div. IX. § 4 d] The Silk Manufactory 1701-4 171

With this encouragement, the undertaking made progress, and, about
this time, 23 looms were in use^ By this period, profits had been
earned sufficient to excite the envy of those who were not members of
the company, and complaints were made that the benefits of the trade
were confined to a small number of persons^ Another objection to the
company was urged by the merchants of Edinburgh, who complained
that the silk manufacture was injurious to the cloth trade. The former
industry depended of necessity on imported raw material, whereas the
latter utilized a home product, therefore the woollen trade should be
encouraged and the silk-weaving industry suppressed ^

A much more serious menace to the continued prosperity of the under-
taking than the opposition of the cloth manufacturers arose from the
neglect of the act of 1701, prohibiting the importation of foreign silk,
and to the facilities for smuggling goods that could be packed in small
bulk^. As in the case of the Royal Lustring company of England, it
was found that it was almost impossible to maintain prices owing to the
supply of smuggled goods being of considerable magnitude ^ Besides,
the passing of laws to encourage certain companies or individuals, by
the prohibition of competing imports, threw the onus of discovery and
prosecution on the favoured companies, and this resulted in the prose-
cutors sustaining " much reproach and discouragement^." In addition,
the scarcity of capital began to be more felt in the first years of the
eighteenth century, and persons who did not find a remedy in land-bank
schemes, or the revival of the Darien company, continued to press for a
sumptuary law. One writer in favour of such legislation says, " who
can deny that every heritor in Scotland doth spend more on superfluities
for himself, his wife, and children, than his taxes for the public amount

1 Parliamentary Papers, 1702— Memorial concerning the State of Manufactures
before and since the year 1700.

2 Parliamentary Papers after 1702— Answers to Memorial given in by the
Merchant Tailors.

3 Acts of the Parliaments of Scotland, xi. p. 132. The statement in the text
must be taken as an ex parte one. Even as late as 1774 it is recorded that little of
the wool then used was the product of the country, most of it being brought from
Newcastle and London (Postlethwayt, Dictionary of Trade and Commerce, Article
on Scotland). The minutes of the Newmills company show that, when Scottish
wool was used at all, it could only be made into the lowest grade of cloth, while
an analysis of the names of sellers to the company suggests that the purchases may
have been dictated by other than strictly commercial objects. At the same time
very large purchases of Spanish wool were made.

* Acts of the Parliaments of Scotland, xi. pp. 53, 54.
^ Vide supra, pp. 80-3.

6 ParHamentary Papers after 1702— Answers to Memorial given in by Merchant
Tailors.

^ a

172 The Silk Manufactory 1704-9 [div. ix. §

to, and much more — is not this prohibition an easy and virtuous way ta
reimburse ourselves^?" The silk manufacturers were charged with
encouraging prodigaHty, and much was made of the fact that this was
one of the very few manufactures encouraged by Parliament which
produced articles of luxury. It was also objected that the industry
employed very few hands. This was said to be a " mistake, for it is
well known that there are a great many young gentlemen, who formerly
were in great straits, who are now subsisting by winding silk " — indeed,
the proprietors of the manufactory contended that they employed as
many persons, proportionately to the size of the country, as were paid
wages in the same industry in England. The merchants who retailed
silk memorialized Parliament showing the injury they had sustained by
the partners in the manufactory themselves acting as retailers (as had
been done by the Newmills company), which was looked upon as " an
attempt to drive a plain monopoly I" When it is remembered that the
founders of the company endeavoured to obtain a monopoly, it is
amusing to find they profess to be surprised at this charge being made,
and point to the fact that anyone may start a manufactory. In 1705,
an overture for an act, prohibiting the wearing of any silk (except black
silk), was brought before Parliaments The proprietors of the silk
manufactory petitioned against this overture becoming law. They
stated that the industry had been brought to an extraordinary degree
of perfection^; but, as against this, it was alleged that the web was
imported into Scotland already warped S The manufacturers further
pleaded for consideration from Parliament in view of the fact that,
through the establishment of the industry, "very many poor were
profitably and virtuously employed," and that they could sell silks
as cheaply as those imported from England S The Union gave them
an opportunity of testing the latter assertion, apparently to the

1 Parliamentary Papers, 1700— Reasons General for a Sumptuary Law. About
this time or not long afterwards there is mention of a counter agitation to remedy
the adverse exchange "by the import of superfluities of many kinds" — A Proposition

for Remeding the Debasement of Coyne in Scotland St Andrews Univ. Lib. Pamphlets
C.10.26~|

2 Parliamentary Papers, 1704 — Answers of the Masters of the Silk Manufactory
to the Representations of the Retailing Merchants.

3 Acts of the Parliaments of Scotland, xi. p. 219. Parliamentary Papers, 1705—
Draft Act— Silk.

* Parliamentary Papers, 1705— Petition of the Merchants and Others concerned
in the Silk Manufactory.

5 Acts of the Parliaments of Scotland, xi. p. 54.
« Parliamentary Papers, 1705— Petition, ut supo-a.

Div. IX. § 4e] Baize and Stocking Companies 1693 173

detriment of the Scottish silk industry, for, in 1709, we find Joseph
Ormiston giving his attention to the cloth trade, and coming forward,
as a petitioner on behalf of a proposed company, for a part of the
grant payable by the Commissioners of the Equivalents

E. Other Textile and Allied Industries.

The Manufacture of Colchester Baizes (1693).

The Manufacture of Stockings (1700).

The Sail-Cloth Manufactory at Leith (1694).

Rope Work of James and Thomas Deans (about 1690).

The Rope Manufactory at Glasgow (1690).

Cordage Manufactory at Glasgow (1700).

John Holland, the founder of the Bank of Scotland, was one of the
many persons with capital at their disposal who, after the Revolution,
were endeavouring to develope Scottish industries. He was instrumental
in forming a company for producing "that sort of cloth, commonly
known as Colchester baises, which will consume a great deal of cloth,
which cannot be profitable either at home or abroad." By an act of
Parliament, dated June 14th, 1693, a company was created, consisting,
in the first instance, of six persons named, to which the usual statutory
privileges of a manufacture were granted. Further, as in the case of
the Scots Linen manufacture and other companies, an entry in the
books to be kept in Edinburgh and London, was sufficient title to the
ownership of shares. This act gives the curious privilege of a
monopoly for seven years as against other joint-stock companies, but
not against private persons, subject to the condition that works
should be established within two years, otherwise the grant was to
determined

As early as 1682, the Newmills company had introduced the making
of stockings by the use of weaving-frames, but the plant was sold in
1689^ In 1700, a number of merchants in Edinburgh petitioned for
encouragement in this industry ^ and in 1706, there were two firms
engaged in the traded

^ Collection of Petitions to the Barons of the Exchequer, vi supra — Petition of
Joseph Ormiston.

2 Acts of the Parliaments of Scotland, ix. p. 313.
^ Vide supra, pp. 143, 149.
* Acts of the Parliaments of Scotland, ix. p. 231.
° Edinburgh Courant, No. 189.

174 Sail-Cloth and Rope Companies 1690-4 [div. ix. § 4 e

Up till the time of William III., Scottish shipping was under a*
grave disadvantage in that it was necessary to build vessels of any
considerable size out of the country, and, once a ship had been ob-
tained, stores, such as sail-cloth and cordage, had to be imported.
Attempts were now made to remedy this state of affairs by the
formation of a company for the manufacture of sail-cloth. In 1694,
a patent was granted certain undertakers incorporating them as a
'' societas,^'' with a monopoly for seven years \ By an act of Parlia-
ment of the year 1696, the monopoly was extended to nineteen years-.
A factory had been built at Leith, which was burnt down in 1710.
As the monopoly was due to lapse (unless renewed) in 1713, the pro-
prietors gave up the trade, and the premises were rebuilt as the Great
Brewery, in the Yard Heads ^

For the provision of home-made ropes, a rope-work had been started
at Newhaven, by James Deans, who had retired from business after
incurring considerable loss. In 1694, his son, Thomas Deans, received
the privileges of a manufacture from the Privy Council, " being
prepared to venture another stock in the same work^.'^ In the
Newmills minutes, there is considerable information as to the members
of the Deans family. By 1703, Thomas Deans was deceased, and his
will was produced by his executor in connection with a holding of stock
in the Newmills company, which amounted to ^6^9,000 Scots, or £1B0
sterling ''.

In 1690, a rope-manufacturing company had been established at
Glasgow, with a capital of ,^40,000 Scots, or rather over .^3,000
sterling^, to which, on May 7th, 1696, the Privy Council granted the
privileges of a manufactured Two years later, this company petitioned
Parliament for a prohibition of imported cordage from the Sound or
the East Seas. It was pointed out, in reply, that the whole kingdom
could not be supplied conveniently from Glasgow, " because of the
dangerous passage by sea," and that it was easier for ship-owners in
the North of Scotland to obtain cordage from Holland than from
Glasgow, till the time came when ropes could be manufactured in
their own districts^. Accordingly, a duty of 60s. per cwt. was im-

1 Reg. Magni Sig. (General Register House, Edinburgh), xiv. (1692-1700), f. 76.

2 Acts of the Parliaments of Scotland, ix. p. 103.

3 The Scots Postman, No. 854, Feb. 28, 1711.

* Acts of the Privy Council quoted by Chambers, Domestic Annals of Scotland,
III. p. 78.

^ Records of a Scottish Cloth Manufactory, pp. 336, 337-

^ Gibson, History of Glasgow, ut supra, p. 245.

"^ Chambers, Domestic Annals of Scotland, iii. p. 87.

8 Parliamentary Papers, 1698 — Overture anent Ropes and Cordage.

Div. IX. § 4e] Cordage Manufactory 1700 175

posed on imported cordage to encourage the Glasgow company ^ By
the time M'Ure wrote his View of Glasgow, this undertaking was
already known as the " old rope work," and, in 1777, it was still in
existence^.

In 1700, a petition was addressed to Parliament for encouragement
to establish a cordage manufactory at Glasgow ^ There is no evidence
to show whether this or the former company, or again a later under-
taking, is that of which M'Ure gives the following description : " The
Rope Work is situated on the west side of Stockwell Street, consisting
of two stately lodgings, belonging to the proprietors, — great store
houses — spinning houses, — garden, and boiling-houses ; and the old
green for spinning large cables, tarred and white ropes, with a pleasant
garden ^^

^ Acts of the Parliaments of Scotland, x. p. 154.
2 Gibson, History of Glasgow, ut supra, p. 245.
^ Acts of the Parliaments of Scotland, ix. p. 231.
* Glasghu Fades, p. 584.

SECTION V. THE WOOL-CARD MANUFACTORY
AT LEITH (ESTABLISHED IN 1663).

One of the industries, established as a result of the legislation of
1661, was a wool-card manufactory at Leith. Up to this time the
instruments, used in carding wool, had been imported ; and, following
the example of England, it was decided to protect the persons who
would start the production of wool-cards in Scotland. As early as
1565 patents had been granted in England which formed the basis of
the important company known as the " society of Mineral and Battery
Works ^^ From the date of its foundation up to 1662 several proclama-
tions had been issued making it illegal to import foreign wool-cards or
to sell " translated" or trimmed-up old wool-cards. Owing to the trend of
events in Scotland it was not till 1663 that a similar organization was
established there. The Scottish act of 1661, while granting large
privileges to infant industries, was quite silent as to the protecting of
them from foreign competition. In this case the keen desire to rival
the English wool trade led to all possible encouragement being given to
a Scottish wool-card manufactory, not only, under the prevailing
mercantilist ideas, to prevent the exportation of bullion, but also to
improve the carding of wool by insuring the use of new wool-cards
only — it having been customary for the people to buy cards which had
been rejected elsewhere and re-made 2. Accordingly, on June 3rd, 1663,
a patent under the Great Seal was granted to James Currie, Provost
of Edinburgh, and James Auchterlony, their assigns and partners
(sociis), conferring the monopoly of producing wool-cards for nineteen
years ^ This privilege was confirmed to the same persons and two
others by an act of Parliament dated September 29th of the same year.
The importation of re-furbished cards is forbidden under the usual
penalties. Prohibitive duties were exacted from persons importing
foreign cards, namely, £6 Scots per doz. " stock-cards," and £S Scots
per doz. of other [new] cards. These duties were to continue for seven

1 Vide supra, 11. pp. 413-15.

2 Parliamentary Papers,, 1690 — Act anent the Manufecture of Cairds.

3 Reg. Magni Sig., x. (1676-84), f. 142.

Div. IX. § 5] Leith Wool-Card Manufactory 1663-89 177

years from the starting of the manufactory. For the next ten years the
tax was to be reduced by one-half, and subsequently imports were to
be free, unless the Lords of the Exchequer saw reason to continue the
imposts. These privileges were subject to the following conditions:
the company must produce a sufficient quantity of cards to supply
the whole country, the price charged for the first seven years must
not be more than ten per cent, in excess of that of those imported before
the payment of import duty, and after seven years the ten per cent,
allowance was to ceased

During the early years of the history of this co-partnership the
importation of re-furbished cards continued; and, for further en-
couragement of the undertaking, the original duties were maintained,
and .the conditions imposed on the company interpreted generously. On
June 11th, 1675, the Lords of the Exchequer endeavoured to prevent
the importation of new and re-furbished cards by the connivance of the
farmers of the customs, and it was ordered that all foreign cards should
be seized and destroyed ^ This course, as well as the endeavour of the
managers to enforce their monopoly by the prevention of the sale of
cards, except those made by them, led to considerable dissatisfaction.
In 1680 there were complaints from Dundee brought before the Con-
vention of Royal Burghs^, and it is not improbable that in view of the
determination of the monopoly in 1682 the patentees were inclined to
moderate their demands for the time.

The financial results of the venture had so far been disastrous. The
capital raised had been thrice lost — according to the tale of the company
— solely owing to the continued importation of re-furbished cards. On
these grounds a renewal of the monopoly, as well as more stringent
prohibition of imported cards, was applied for^ On February 8th, 1681,
an extension of the monopoly was granted for a further period of
nineteen years'^, and on July 15th the Lords of the Exchequer repeated their
previous order to the tacksmen of the customs to enforce the law against
imported wool-cards. By an act of the Privy Council of December 6th,
1689, the same prohibition, especially as affecting re-furbished cards, was
again repeated^.

These privileges resulted in several real or alleged grievances. Like
the Newmills woollen company, the Leith Card manufactory had the

^ Acts of the Parliaments of Scotland, vii. p. 488.

2 Parliamentary Papers^ 1690— Information of the heirs of John Hay... and
Managers of the Caird Manufactory at Leith.

3 The Records of the Convention of Royal Burghs , 1677-1711, p. 21.
* Parliamentary Papers, 1690— Information, &c., ut supra.

^ Reg. Magni Sig., x. f. 142.

6 Parliamentary Papers, 1690 — Information, &c., ut supra.

S. C. III. 12

178 Leith Wool-Card Manufactory 1685-6 [div. ix. § 5

right of compelling suspected persons to testify on oath, and in 1685
the managers forced traders to make the necessary declaration before
the supreme judicatory. This was felt to be a hardship, and a petition
was presented to Parliament praying that the oath might be taken in
the burgh where the person making it resided ^ As a result of a seizure
arising out of the act of the Privy Council of 1689, the company and the
Royal Burghs came into conflict. John Spruell had imported cards, and
when these were destroyed, he determined " to raise the Royal Burghs
to break the manufacture ^'■' A draft act was prepared which, after
reciting the terms of the two patents, set forth that none or very few of
the conditions of the first patent had been performed of set purpose so
that the monopoly might be extended ; for this reason it was proposed
to be enacted that the patent should be null and void, and that wool
cards might be imported as formerly ^ The supporters of Spruell alleged
that the cards made at Leith were neither good nor cheap. These
charges educed a considerable amount of evidence from the manu-
facturers. It was stated a stock of cards, valued at <^1,000 sterling,
was held at Leith, and that none could deny their cheapness " except
such as buy them as a cloak under which they sell great quantities of
old re-furbished cards every year which, when search is made for the old
ones, are always produced and kept unsold for that eff*ect.'' The re-
made cards are declared to be " a perfect cheat and have beene the ruin
of the manufactured" The fraud consisted in the fact that the re-
furbished cards could be bought in England at Ss. a doz., and were sold
in Scotland at the same price as new ones. The latter fetched from
18^. to 20^. a doz. in London, and the Leith undertaking offered cards
made there for 20^. a doz., with six months' credit, thus conforming to
the provisions of the act of 1663. The quality of the Leith cards was
guaranteed by the fact that they were in use at the Newmills and other
manufactories, and the masters of these works had testified that the ■
cards were as good as any they could obtain from England or abroad'.
In so far as this statement relates to the Newmills woollen manufactory
some qualification is required, for in this case the cards required for the
best work were imported; for instance, on June 2nd, 1686, 4 doz. Spanish
wool-cards were ordered from Holland^. The Leith company also

1 Reports of the Convention of Royal Burghs, 1677-1711, p. 59.

2 Parliamentary Papers, 1690 — Information, &c._, ut supra.

3 IMd.j 1690 — [Draft] Act anent the Manufacture of Cairds.
* Ibid., 1690 — Information, &c., ut supra.

^ Ibid., 1690 — Information for the Partners of the Manufactory at Leith for
making Wool and Tow Cards.

^ Records of a Scottish Cloth Manufact^yry , p. 123.

Div. IX. § 5] Leith Wool-Card Manufactory 1686-1705 179

claimed that it could undersell any cards, either made in Scotland or
imported from abroad, and that exports could be made at a profit.
The tacksmen of the customs were said never to have exacted half the
duties on new cards and to have admitted re-furbished ones, while it was
added that large outlays of capital had been made " on the public faith
of the laws," so that any interruption of the monopoly would be a great
hardship before this outlay had been recovered. It required ^500
sterling to provide calf-skins, and £^00 sterling to pay the wrights
who prepared timber for making the cards, besides many other expenses.
In all sixty families had been maintained, and these were in danger of
being reduced to beggary, if the importation of cards were permitted.
On these grounds the company asked that the privilege of a manu-
factory should be granted to it for a further period of nineteen years, and
that all foreign cards should be prohibited for all time coming \ The up-
shot of the opposing petitions was that the draft act against the company
was referred to the Commissioners of Fines and Forfeitures, and nothing
was done 2.

Though the Royal Burghs had suffered a check in the agitation
against the company in 1690, they were far from allowing the matter to
rest. In 1691 the agent of the burghs was directed to endeavour to
obtain a suspension of the privileges of the manufactory, and in the
following year he was ordered to defend any burgess, inhabiting a Royal
Burgh, who was charged at the instance of Ewan MacGrigor, one of the
managers of the co-partnery. In 1696 a Committee was appointed to
hear complaints against the monopoly, and, on the Committee having
reported, the Convention recommended the Commissioners to Parlia-
ment "to discharge the great grievance of the manufacture of wool-
cards^." No result followed from these representations. The other
side had not been idle, and a decree was obtained which compelled
persons requiring wool-cards to buy those made at the Leith manu-
factory.

This decree evoked an indignant protest from the Royal Burghs in
1703, which declared that the cards made at Leith were " insufficient,"
and that there was " one universal complaint against them^" In 1705
a memorial against the company was transmitted to Parliament. It
alleged that there were hundreds of complaints from persons, even from
whole parishes, which had been distressed by the masters of the manu-

1 Parliamentary Papers, 1690— Petition of John Hay and others, and Information
for the Partners, &c.

2 Ibid., 1690— [Draft] Act anent the Manufacture of Cairds.

3 Records of the Convention of Royal Burghs, 1677-1711, pp. 141, 155, 210, 229,
303.

4 Ibid., p. 346.

12—2

180 Leith Wool-Card Manufactory 1705-7 [div. ix. § 5

factory. To this the company repHed that all prosecutions had been
directed against the unlawful importation of "that rotten stuff of
foreign old cards," which, " though in a manner cast away abroad and
bought up for little or nothing, yet are endeavoured to be imposed on
this kingdom at as high a rate as the manufactory ''s cards." The
whole animus against the undertaking was due to its endeavour to
enforce the legislation against illegal importation of re-furbished cards.
As against the attacks made " by whispers and complaints of querulous,
envious persons, importers and retailers of old cards, for the alleged
insufficiency of their work," the approval of the woollen manufactories
is again quoted, and any calumnies were abundantly disproved by the fact
that "the manufactory is so well settled and appro ven^" What was
the upshot of the quarrel is unknown. It is probable that the change
in the wool trade after the Union made the monopoly no longer worth
defending. As to its financial results, during an existence of over forty
years, it is not possible to pronounce a decided opinion. The assertion
that the stock was thrice lost, early in the history of the concern, is
confirmed by the fact that Provost Currie, one of the original patentees,
was in great pecuniary difficulties in 1695-. From that date till the
Union it would appear that the considerable number of woollen works
established would increase the demand for carded wool, and consequently
for wool-cards. Therefore, provided the Leith company could render
importation sufficiently unattractive, large profits should have been
made. That the undertaking had at least some measure of success
is indicated not only by its lengthy existence, but also by the reference
to the envy of its opponents in the document quoted above.

1 Parliamentary Papers, 1705 — The Representation of John Hay, Ewan Mac-
Grigor and Partners.

2 Ibid., 1695 — Act in favour of James Currie. Acts of the Parliaments of Scotland,
IX. p. 489. App. p. 124.

SECTION VI. THE SOCIETY OP THE WHITE
WRITING AND PRINTING PAPER MANUFACTORY
OP SCOTLAND (ESTABLISHED IN 1694).

As early as 1590 an attempt was made to establish a paper manu-
factory in Scotland, but without success ^ It was not till the year 1675
that it could be said that paper-works were actually founded. Mills
were built at Dairy, on the Water of Leith, within easy reach of
Edinburgh. Under the acts of 1661 and 1662 foreigners were brought
into the country, and the usual privileges granted to the manufacturers.
The founders of this industry had the misfortune to have to re-erect
their mills owing to a fire having destroyed the original buildings. By
1679 the works were able. to produce "grey and blue paper much finer
than ever this country formerly offered^." On March 7th of the same
year a petition was presented to the Privy Council, stating that not only
did the manufactory supply good paper which had hitherto been im-
ported, but also it was deserving of encouragement through its use of
rags, " which formerly were put to no good use." The gathering of
rags gave employment to numbers of poor people, and already many
Scotsmen had been instructed in the art of making paper. The owners
of the mills asked that they should receive encouragement by the Privy
Council suppressing " the faulty custom, not practised anywhere else," of
employing fine rags for the making of wicks for candles. It was
represented that cotton wicks ought to be used by the candlemakers,
which, though dearer, would give better light. In reply to this
petition, the Privy Council prohibited the use of rags for making
candle-wicks ^

Another paper-mill had been established by Peter Bruce about 1685
in conjunction with the working of a monopoly he had obtained for
the making of playing-cards. Bruce fell into monetary difficulties, as

^ Chambers, Domestic Annals of Scotland, i. p. 195, ii. p. 398.

2 Ihid., II. p. 398. In 1679 another paper-work was established loj Nicholas de
Champ on the banks of the Cart. His apprentice erected a larger factory at Miln-
holm. Glasghu Fades, p. 1224; Smiles, Huguenots, p. 338.

3 Chambers, Domestic Annals of Scotland, u. pp. 398, 399.

182 Scots White Paper Manufactory [div. ix. § 6

he alleged, through a bill of suspension "surreptitiously stolen forth
against him " by some merchants of Ayr, whom he had prosecuted for
contravention of his monopoly ^ Eventually the exclusive grant,
together with the paper-mill, was transferred to James Hamilton of
Little Earnock, who petitioned for a confirmation of the privileges
enjoyed by Bruce. He obtained an act of Parliament in 1693, which
gave the privilege of a manufacture, as defined by the act of 1681, to
his various undertakings 2.

These works confined themselves to the production of coarse grey
and blue paper, the attempts made to manufacture writing paper having
failed^ As in several other cases, local efforts to found new industries
did not succeed through want of capital, and because (as recorded in the
act founding the Scots Paper company) " such undertakings cannot be
managed otherwise than by a society and incorporation 1" Nicholas
Dupin, a French refugee, who had already founded Paper companies,
which were so far successful, in England and Ireland, was encouraged by
several noblemen to introduce English capital into Scotland for the
manufacture of white paper. He had already had experience of Scottish
industry through his connection with the promotion of the Scots Linen
company, of which he was deputy -governor^ Accordingly, he petitioned
the Privy Council on July 5th, 1694, asking for the " privileges of a
manufacture"' according to the act of 1681. He stated that "he had
arrived at the art of making all sorts of fine paper moulds, as good or
better than any made beyond seas and at a far cheaper rate, insomuch
that one man may make and furnish more moulds in one week than any
other workman of other nations can furnish in two months' time." He
and his associates "have arts to make the greatest mortar and vessel
for making paper without timber,'' and they.have also provided " several
ingenious outlandish workmen to work and teach their art in this
kingdom ^" The Privy Council granted permission for the establishment
of paper-mills in Scotland, " but without hindering any persons already
set up," and also " to put the coat of arms of this kingdom upon the paper
which shall be made at these mills'." On July 10th, 1695, by act of
Parliament, Dupin and his partners were granted the privileges of a

1 Privy Council Papers^ 1G85-6 (General Register House, Edinburgh) — Petition
to the Privy Council by Peter Bruce, Master of the Manufactory of Playing Cards.

2 Acts of the Parliaments of Scotland, ix. p. 340.

3 Petition of Nicholas Dupin to the Privy Council in Domestic Annals, iii. p. 86.
* Acts of the Parliaments of Scotland, ix. p. 429.

» Vide supra, pp. 64, 71, 163.

6 Chambers, Domestic Annals of Scotland, iii. p. 86.

"^ Ibid., in. p. 87. Though there are several petitions from the company at the
Register House, the watermark mentioned above cannot be detected in any of
them.

Div. IX. § 6] Floatation and Organization 1694-7 183

manufactory, with the right to incorporate themselves under the title of
the Scots White Paper Manufactory'^.

On the act of the Privy Council being obtained in 1694, the first
steps towards starting works had been made, on a small capital outlay.
The mills appear to have been at Yester^, and there was later a ware-
house for storing paper in Edinburgh at Heriot's Bridge, in the Grass-
market^. A month after the passing of the act in favour of the
company, articles of partnership were signed, on August 19th, 1695,
which prescribed the internal management of the undertaking and fixed
the terms for a new issue of shares. At the first general meeting every
year thirteen shareholders were to be chosen to act as a governing body,
and these should elect from their own number a Praeses'*. The capital
already paid in, together with that now offered for subscription,
amounted to ^5,000 sterling. This was divided into 1,400 shares ^
No one person, except by an act of the general meeting, was allowed to
subscribe for more than twenty shares, so that the minimum number of
shareholders would have been seventy, if the issue had been taken up^.
Each five shares entitled the owner to one vote. The shares were
offered at £^ sterling, or a premium of 12 per cent. In addition,
each shareholder was to pay a further premium of 18,9. sterling of
"subscription money" to Dupin at the time of application''. At the
same time, one-third of the £4^ sterling was to be paid to the treasurer,
and the remainder " whensoever the same shall be judged necessary by
the general meeting or a committee of seven persons, to be chosen out
of their number for that effects" In 1697 Dupin stated that the
project was likely to have failed for want of enough subscribers, unless
the promoters had taken up the shares themselves, which at that date
they were prepared to offer " at a reasonable rate^."

In 1696 the producing stage had been reached, and according to
contemporary evidence, enough paper was being made to supply the
country i**. The next year the company, in support of a petition to the
Privyj^Council, was able to provide evidence of having produced good

^ Acts of the Parliaments of Scotland, ix. p. 429.

2 Parliamentary Papers, 1698— Overture for an Act for the Improvement... of
the White Paper Manufactory.

3 Advertisement in Edinburgh Gazette, No. 8, March 23, 1699, Advocates'
Library (bound with The Scots' Postman).

* Articles concluded and agreed upon by the Society of the White Writing and
Printing Paper Manufactory at Edinburgh, the 19th of August, 1695, in the terms
whereof partners were to be assumed [Brit. Mus. 1391 . c. 21], p. 2.

s Ibid., p. 6. 6 Ibid., p. 5.

7 Ibid., p. 7. ^ Ibid., p. 7.

» Acts of the Privy Council of Scotland, under July 15, 1697-

^0 Chambers, Domestic Annals of Scotland, in. p. 88.

184 Scots White Paper Manufactory [div. ix. § 6

white paper, but it required " a little further encouragement to be an
advantage to the whole kingdom."

Mention was made of the great expense incurred in securing foreign
workmen, and the fact that the making of paper had now been brought
to perfection. The other industries, that had received special privileges,
were less generally advantageous than this one, because they depended
on foreign raw material, whereas paper not only was made from some-
thing found at home, but utilized what would otherwise have been a
waste product. The company was able to undersell foreign paper, but
in view of having introduced the manufacture of white paper, it asked
the sole privilege of this trade in Scotland for a term of years, " because
it was unjust that others should reap the reward of their labours,"
especially as the books for subscriptions had remained open for such a
long time. It was also urged that there was some danger that their
servants might be enticed away, and therefore they asked further powers
similar to those conferred upon the Newmills company ^ The latter
concession was granted by the Privy Council : but, in view of the existence
of other paper-mills, the monopoly of white paper-making was with-
held. Having failed to obtain the monopoly, an overture of an act
was presented to Parliament in 1698 asking encouragement in other
directions. Apparently the demand for paper, made by the company,
had increased considerably, for there was some difficulty in obtaining a
sufficient supply of rags. An act was asked prohibiting candlemakers
from using wicks made of rags, as in the case of the Dairy Mills ^
The candlemakers of Edinburgh petitioned against the draft act, claim-
ing that they had a prescriptive right to use rags in their trade. The
Paper company had " in a most clandestine manner " obtained an act
of the Privy Council preventing them from using rags as heretofore, and
the candlemakers had raised a process of reduction. The company " fearing
the reduction would prevail," had brought in the overture with a view
to monopolizing the supply of rags, reducing the wages of rag-pickers,
and, in fact, obtaining the raw material at an artificially low price by
abolition of the competition of the candlemakers ^ The company also
complained that not only did the government abstain from using
home-made paper, but that those who imported for official purposes
ordered much larger quantities than were required, which were sold
to the public. The draft act also recited that "the importing from
Holland and the vending here of many English books which are usually,

1 Acts of the Privy Council, under July 15, 1697.

2 Parliamentary Papers, 1698 — Overture for an Act for the Improvement ... of
White Paper.

3 Ibid. — Representations of the Candlemakers of Edinburgh against the White
Paper Manufacture.

Div. IX. § 6] Attack by the CandlemaJcers 1698-9 185

or may be, printed or reprinted here, is not only a manifest prejudice
to the improvement of printing and the paper manufactory in this
kingdom, but may also be the means of corrupting and leading the
common people of this kingdom into dangerous errors by their reading
such imperfect Bibles, New Testaments, Psalm-books, and Confessions
of Faith." Therefore it was proposed to levy a duty of a fixed per-
centage on all writing or printing paper imported, but this act did not
become law^

In the next year (1699) the company advertized a considerable stock
of Imperial writing, printing, pressing, and packing papers 2. After
1699 there is no further direct information as to the fortunes of the
company. From a curious series of events it would appear, however,
that, before 1705, the undertaking had ceased to manufacture, and that
the mills had been let to Evander M'lver. At that date there were two
Edinburgh newspapers, the Gazette and the Courant. For some time
there had been a keen rivalry between the proprietors. It happened
that in 1705 Evander M'lver, who was described as the " tacksman of
the Scots Manufactory paper-mills," had petitioned the Privy Council to
complete the reprinting of an English book, entitled War betwixt tJie
British Kingdoms Considered. The Courant published this petition, and
the Privy Council, disapproving of the work in question, suspended the
publication of both newspapers.

1 Parliamentary Papers, 1698— Overture for an Act, &c.

2 Edinburgh Gazette, No. 8.

SECTION VII. INDUSTRIES RELATED TO IRON,
STEEL AND MINING.

MiNB-DRAININa ENGINE OF MaRMADUKE HuDSON AND

partners (1693).
The Company for working Mines and Minerals in the

Kingdom of Scotland (1695).
co-partnery for the smelting of minerals (1701).
John Meiklb's Foundry, Edinburgh (1686-1705).
Glasgow Hardware Manufacture (1699).
Glasgow Hardware Manufacture (1700).

Owing to the generally backward condition of Scottish industry in
the sixteenth and seventeenth centuries, only partial and unsuccessful
efforts had been made to develope the mineral resources of the country.
Mention has already been made of the various undertakings for working
the mines royal \ During the greater part of the seventeenth century
coal mining proved unprofitable. In 1621 several proprietors of coal-
haughs stated that they were <^1 0,000 to ^£^20,000 out of pocket. One
mine was on fire and others had been drowned, owing to insufficient and
defective pumping machinery^.

Towards the end of the seventeenth century the progress of invention
had made it possible by means of pumping engines to recover mines that
had become derelict through flooding. In London there were several
companies formed to exploit patents granted for apparatus of this
character ^ In 1693 an inventor, named Marmaduke Hudson, came to
Scotland to form a company for a draining engine which he stated had
already been tried in Cornwall and which had been found to raise more
water from a coal-pit in an hour than any other engine could in a week'*.
Hudson had already obtained a patent in England which secured his

1 Vide supra J ii. pp. 406-11.

2 Macintosh _, History of Civilization in Scotland, in. p. 292.
2 Vide supra, ii. pp. 479-82.

* Acts of the Parliaments of Scotland, ix.. Appendix^ p. 92.

Div. IX. § 7] Mining and Smelting Companies 187

rights in the invention in Scotland also, but he applied to the Scottish
Parliament for confirmation, because "he well knew that this ancient
and honourable kingdom has no dependence upon nor can anyways be
regulate by the laws of England." He was granted the exclusive right
for 19 years of using the engine he had invented, besides the privilege of
a manufactured Whether the pumping plant was as effective in
Scotland as it was said to have been in Cornwall does not appear.

In 1695 Nicholas Dupin, who had already formed the Scots Linen
manufacture and White Paper companies 2, succeeded in raising a
considerable joint-stock for mining purposes, and securing the services of
trained miners. This company, which was entitled the Company for
working Mines and Minerals in the Kingdom of Scotland^ had obtained
leases of mineral properties from several persons. The company
petitioned Parliament for the privilege of a manufacture and also the
right of " making pennies, half-pennies and boadles out of the copper of
this nation, but without hindering any person who had already set up
mines." The act appears to have been passed with the exception of the
right of coining; and, in the conferring of the privilege of a manufacture,
it is explicitly stated that any concession, made to the company by Parlia-
ment, is to be exclusive of a monopoly^. It is probable that this
enterprize did not succeed, and its failure appears to be indicated when
John Binning wrote in 1704 that " the English raised a fund to send
strangers of late amongst us to discredit our mines'*."

Though the iron and steel trades were in a very rude state in Scotland,
one can find traces of improvements being attempted. For instance, in
1701 an act of Parliament was passed in favour of a co-partnery for
the smelting of minerals^.

Meanwhile new industries, connected with the manufacture of iron
and steel, had been founded. In 1686 John Meikle received the usual
privileges of a manufacture for the founding of bells and cannons ^ He
established a foundry, called the Founding House, at Castle Hill,
Edinburgh. Unlike the great majority of those who obtained privileges
from the State, he did not take others into partnership, and on his death
the business was sold in 1705 by his widow ^

In 1699 a number of English merchants had brought to Glasgow

^ Acts of the Parliaments of Scotland, ix. p. 323.

2 Vide supra, pp. 163, 182.

3 Parliamentary Papers, 1695— Act in favour of the Company for working
mines, &c.

* A Letter to a Member of Parliament [by John Binning], p. 2.

^ Acts of the Parliaments of Scotland, x., Appendix, p. 99.

6 lUd., VIII. p. 608.

7 Edinburgh Courant, No. 16.

188 Glasgow Hardware Manufactures [div. ix. § 7i

workmen from the South who were skilled " to work all hardware, such
as pins, needles, scissors, scythes, tobacco-boxes, and English knives,"
and on petition to the Privy Council the privilege of a manufacture
was granted. A similar grant was made in 1700 to another group of
merchants at Glasgow for the same industry, whereby it was anticipated
that employment would be provided for " many poor and young boys,
who are, and have been, in these hard and dear times, a burden to the
country^" In 1703 corresponding immunities were conferred on John
Dunbabbine for making pins at Aberdeen.

^ Act of the Privy Council in Chambers, Domestic Annals of Scotland, iii. p. 127.

SECTION VIII. GLASS AND BOTTLE WORKS.

The Glass Work at the Citadel of Leith (1664).
The Glass Manufacture, North Leith (1699).
Works at Morison's Haven (1696).
Glass Manufacture at Wemyss (1698).
The Glass Manufacture at Glasgow (1699).

Several early patents had been granted for glass works — one of
which was established at Wemyss in Fife^ but it was not till after the
Restoration that the industry became permanent. Leith was the chief
seat of the manufacture during the latter half of the seventeenth
century. A patent was granted Charles Hay in 1661 with the
monopoly of making certain kinds of glass 2. On February 9th, 1664,
the Privy Council, finding that Robert Pape, master of the glass works
at the citadel of Leith, could make all sorts of glasses, and that there
was so much importation of foreign bottles and glass that the work was
in danger of being rendered useless and unprofitable, forbade the public
to buy or use any other glasses or bottles but these I By 1689 the
same work could not only produce green bottles but also "chemistry
and apothecary glasses, in greater quantity in four months than was
ever vended in the kingdom in a year,^' and at as low a rate as goods of
similar quality imported from Newcastle or London. The Privy
Council, besides granting the privileges of a manufactory, repeated the
act of 1664 prohibiting the importation of foreign bottles, provided
that the Leith works should not charge more than ^s. 6d. per doz.^

About 1699 a company was formed which started works in North
Leith^. In 1700 a representation was made to the Privy Council

^ Chambers, Domestic Annals of Scotland, i. pp. 428, 506, 507.

^ Collection of MSS. lettered '^'^ Scotland — Trade and Manufactures" (Advocates'
Library).

3 Acts of the Privy Council of Scotland, 1661-7, f. 343.

* I bid. J Oct. 10, 1689; Chambers, Domestic Annals of Scotland, in. ]>. 23.

^ Leith and its Antiquities, by J. C. Irons, 11. p. 1 43 ; History of Edinburgh, by
Hugo Arnot, p. 58.

190 Leith Glass Manufacture 1699-1710 [div. ix. § 8

stating that the proprietor of the glass works at Newcastle had sent two
thousand six hundred dozen bottles to Montrose — a quantity, according
to the Leith company, sufficient to over-stock the whole of Scotland ^
The Council ordered the company to seize the consignment of English
bottles, which was adjudged forfeit to the Crown. In 1706 the master of
the works was advertizing freely. He declared that bottles and all sorts
of glass were made "as good as ever was^." In 1710 "chopin bottles''
were offered at 26.y. Scots, and in addition "whoever pleases may
have from the clerk a testificat, which will prevent the buyers being
imposed upon by getting other bottles under the name of Leith
bottles^''

The reference in the " testificat " is to the product of other works
which had been founded in the last years of the seventeenth century.
In 1696 William Morison of Prestongrange established works for
making "all sorts of bottles such as vials, drinking, window, mirror,
and warch [?] glasses'" at his estate at Aitcheson's Haven or Morison's
Haven*. The Privy Council granted the privileges of a manufacture to
this undertaking on April 27th, 1697, and in the following year Morison
petitioned Parliament for a monopoly^. The matter came before the
Committee of Trade on August 4th, 1698. Although three years before
it had been decided " to encourage " the glass-making industry^, it soon
became apparent there was a feeling against any exclusive grant. The
matter was postponed from the morning meeting; and, at a special
sederunt in the afternoon, the question was first debated as to whether
Morison might not be encouraged by an exclusive grant " for some few
years." This was decided in the affirmative, and the next point was
the period of the monopoly. Opinions were divided as to whether it
should be seven or nine years and finally the nine years' term was carried,
under the condition that Morison should give security to produce
sufficient glass to supply the country. The grant of an exclusive
privilege was dealt with in a rather Hibernian manner, for at the close
of the meeting a motion was brought forward that any other person
should have the right to set up works after two years. It was proposed
as an amendment that, in the terms of the original motion, this
period should be nine years, and finally a term of exemption from
competition of only two years was carried''. When the bill came to be

1 Chambers_, Domestic Annals of Scotland, iii. p. 229. For the reasons of this
export from England^ vide supra, p. 112.

2 Edinburgh Gourant, No. 185.

3 Ihid., No. 697.

* Chambers, Domestic Annals of Scotland, rii. p. 164.

^ Acts of the Parliaments of Scotland, x. p. 180.

^ Parliamentary Papers, circa 1695 — List of Acts to be desired.

7 Ibid., 1698 — Minutes of the Committee of Trade.

Div. IX. § 8] A Glass Act in Committee 1698 191

drafted, the grant of special privileges was expressed in the form that
Morison should have a monopoly for nine years as against the
proprietors of all works, which had not been set up within two years
from the date of the act which was September 1st, 1698, and the
prohibition of foreign glass, granted to the works at the citadel of
Leith, was confirmed \ Though the only name mentioned in Morison's
act is his own, it is not unlikely that he had others associated with him
in the enterprize. Though mirror glass was made at Morison's Haven
the polishing of it was carried on by a naturalized Frenchman,
Paul Le Blanc, who had many disputes with the incorporation of
Wrights of Edinburgh, who impeded him as far as they could 2. In
1701 he was associated with others in a glass manufactory, and, on his
application to Parliament for a remission of the duty on unpolished
glass, a counter-petition was filed by Sarah Dalrymple who had a
monopoly for importing mirrors ^

The clause in Morison\s act, which granted two years' grace before
the commencement of the glass-making monopoly led to two other
companies, for the same industry, being formed. On February 22nd,
1698, David, Lord Elcho, applied to the Privy Council on behalf of
himself and partners for the statutory privileges in favour of a manu-
factory of glass, he proposed to establish at Wemyss, where glass had
formerly been made, and in the following September this co-partnery
received an act of Parliament similar to Morison's, but saving the rights
of the latter*.

It appears from a petition of James Montgomery, one of the partners
in the South Sugar House^, presented to Parliament on November 12th,
1700, that the Wemyss company had not at that time started works.
He proposed to establish a company at Glasgow for making glass and
soap, stating that it was "the policy and interest of all nations to
improve industry, especially in societies, who design improvement of any
part of the natural product of the country." He had found ferns — " a
most useful material in glass-making" — were very plentiful near
Glasgow, and in the West Highlands there were large quantities of
wood-ashes which could be employed in making soap. Glass, made at
Leith and Morison's Haven, could only be brought to Glasgow " at vast
charges and great hazard," and besides the latter was too dear. Mont-

^ Acts of the Parliaments of Scotland, x. p. 180.

^ Chambers, Domestic Annals of Scotland, in. p. 154.

3 Parliamentary Papers, 1701— Petition of Le Blanc, Edinburgh, Petition of
Paul Le Blanc and Wm. Scot, Masters of the Glass Manufactory. This Wm. Scot
appears to have been the same who in 1693 obtained privileges for a coach-factory.

* Acts of the Parliaments of Scotland, x. p. 179.

^ Vide supra, p. ,186.

192 Glasgow Glass Works 1700-30 [div. ix. § 8

gomery''s partners had been engaged for the past ten months in erectinj
works at a large outlay. For these reasons he asks not only the
statutory privilege of a manufacture, but also additional grants similar
to those in favour of the works at Leith and Morison's Haven. Morison
opposed this petition, and there is no record of any concession being
made by Parliaments In the following year the same petition was
brought before the Privy Council, when the proposed company was
permitted to make "glass and soap of all kinds, not secluded by the said
Morison of Prestongrange and his act of Parliament^.'' In all proba-
bility this meagre "encouragement"" was not sufficient to enable the
Glasgow undertaking to hold its own against rivals who had not only
established businesses but also enjoyed exemption from taxation. It is
recorded that a new bottle house was erected in 1730, which was
supposed to be the first, thus proving that the one built in 1699 must
soon have been used for some other purpose than that for which it had
been originally intended'.

^ Acts of the Parliaments of Scotland, x., Appendix, p. 49.
2 Chambers, Domestic Annals of Scotland, iii. p. 128.
^ Glasghu Fades, p. 585.

SECTION IX. COMPANIES FORMED TO CARRY
ON MISCELLANEOUS MANUFACTURES.

Gun-Powder Manufacture by James Gordon and partners

(1690).
Gun-Powder and Alum Manufactures by Sir Alex. Hope

AND partners (1695).
Leather Works (Whitefield Heyter and partners) (1695).
Leith Combmakers (1695).
Leith Saw-Mills (1695).
Porcelain and Earthenware Works at Glasgow (1703).

In 1690 a London merchant, James Gordon, applied to Parliament
for a privilege for himself and partners, to enable him to establish a
gun -powder manufactory. As long as Gordon's powder was sold at a
reasonable price, importation except by the Privy Council should be
forbidden. The co-partnery was to have a seal, and all unsealed powder
was subject to forfeiture. Besides the usual privileges of a manufacture,
the society was to have the sole right of making powder in Scotland for
the King's life and for [...] years after his death. The servants of this
undertaking were to have entry into premises to search for and remove
the " peterish earth " used in powder making^ There is no evidence as
to whether this overture was passed by Parliament or not, but, in any
case, in 1695, there were no powder works in Scotland. In that year Sir
Alexander Hope and his co-partners asked for encouragement to establish
both powder and alum works — the latter being attempted for the first
time. By an act dated July 5th this co-partnery received the privilege
of a manufacture with the amplification thereof granted to the Newmills
and Linen companies, on condition that the works were completed within
two years 2. The works were duly established, and "a great stock of

1 Acts of the Parliaments of Scotland, ix., Appendix, p. 42.

2 Ibid., IX. p. 420.

s. c. III. ]^

194 Powder, Leather, Comb Cos. 1690-1702 [div. ix. §

money" was invested in the two concerns. That applied to the pro
duction of alum was a complete loss, but the powder works proved a
success \ About the year 1700 it was testified that " not only was good
powder made at home but that good and serviceable guns" were also
produced 2. According to the proprietors, in 1702 "the making of
powder had been brought to that perfection that no other nation doth
exceed us^"" They accordingly asked that the prohibition of foreign
powder, granted them for nineteen years, should not be revoked.

In the seventeenth century leather was extensively used for house-
decoration, especially in the form of stamped leather hangings. For a
considerable period such hangings had been imported, but in 1681 the
Privy Council granted an exclusive privilege of this manufacture for nine-
teen years to Alexander Brand, an Edinburgh merchant^. Before the
expiration of this act, in 1695, Whitefield Heyter, a goldsmith of London,
applied to Parliament for encouragement on behalf of a proposed company
for leather manufacturing. The Skinners and other incorporated trades
protested against the grant of privileges on the grounds that, Heyter
and his partners being English, the success of the company would mean
the sending from Scotland of money to pay dividends to the partners,
also because there was no provision for this company teaching Scottish
apprentices. Eventually Parliament confirmed a previous order of the
Privy Council, granting the privilege of a manufacture, subject to the
conditions that Heyter should accept Scotsmen both as partners and
apprentices, and that he should not enter any Royal Burgh in the course
of his trade without an invitation from the magistrates ^ An anonymous
writer in 1700 mentions leather- work as one of the industries which was
then in a flourishing condition ^

In 1695 an existing co-partnery, which made "all sorts of combs,
ink-horns, and other works of horn, ivory, or torteshell'"' at Leith,
received the privilege of a manufacture and of incorporation, on the
condition that the members should not have a monopoly and that they
should admit any who wished to join the society''. By 1700 the co-
partnery consisted of at least seven persons, and trouble had arisen with
one of the original partners, who had withdrawn from the company.

1 Parliamentary Papers, 1702— Petition of the Owners of the Gun-powder and
alum works.

2 MS. Discourses anent the improvements may be made in Scotland, ut supra,
f. 15.

3 Parliamentary Papers, 1702— Petition of the Owners of the Gun-powder and
alum works.

* Chambers, Domestic Annals of Scotland, ii. p. 427.

^ Acts of the Parliaments of Scotland, ix. p. 493.

8 A Letter to a Member of Parliament, Edinburgh, 1700, p. 9.

^ Acts of the Parliaments of Scotland, ix. p, 490,

Div. IX. § 9] Saw-Mill and Pottery Cos. 1695-1703 195

The seceding member, named William Park, after selling his share
had secured foreign workmen and was now endeavouring to obtain
encouragement from Parliament for rival comb works. The original
" incorporation," though a monopoly had been provided against in the
act of 1695, now claimed that it alone should have the privilege of a
manufacture. The members urged that they were all Scotsmen whom
Park designed to make the servants of foreigners by taking trade away
from them. " They were capable, yea more capable than Park and all
his strangers to serve the kingdom \" This strongly-worded protest,
though it was based on very slight grounds, appears to have sufficed to
exclude Park from obtaining the privileges he asked.

In the same year, 1695, parliamentary privileges were granted to a
saw-mill at Leith. The act was promoted by a William Scot, who
was probably the same Edinburgh coach-builder that appeared in 1701
as the master of glass works ^. A number of partners were joined in this
undertaking, which, besides obtaining the privilege of a manufacture, had
the additional grant that no other saw-mill should be erected in Leith
or within a radius of fifteen miles for a period of nineteen years ^

Though Robert Douglas of Leith had obtained encouragement in
1695 to start soap, sugar, starch and earthenware works, he only
succeeded in establishing the first-named undertaking*. At the be-
ginning of the eighteenth century there were no china or pottery works
in actual operation, for, though Douglas had built a kiln at considerable
expense, he could not bring the undertaking to a producing stage,
because " owing to the course of trade for the last five years he could get
none to join in such a public and expensive work."*"* While matters were
in this condition, William Montgomery of Glasgow applied in 1703 for
an act incorporating a proposed company, with the monopoly of making
" lame purslain " for a period of years. Douglas petitioned against any
such grant, on the ground of the expenditure he had already incurred on
similar works, and, to let Parliament see that "he was not so much
concerned for his own private interest as the public good,'' he was
content to take Montgomery and his partner " into society with him " so
that the works might be the more effectually carried on^ Finally,
Montgomery was granted the encouragement he asked with a monopoly
for fifteen years and the right to form a society ^

1 Parliamentary Papers, 1700— Leith Comb Makers.

2 Vide supra, p. 191 (note). ^ Acts of the Parliaments of Scotland, ix. p. 491.

4 Ibid., IX. p. 491 ; Parliamentary Papers, circa 1695— List of Acts to be desired.

5 Parliamentary Papers, 1703— The Petition of Robert Douglas, the ehler and
younger, soap-boilers of Leith.

^ Acts of the Parliaments of Scotland, x. p. 111.

13—2

DIVISION X.
BANKING AND FINANCIAL COMPANIES

SECTION I. THE GOVERNOR AND COMPANY OF
THE BANK OF ENGLAND (incorporated 1694).

Amongst the many schemes of the years 1691 to 1695 there was one
which was destined to render signal service to the State, and to become
an important maker of the financial history of England. This was the
Bank of England. But to appreciate fully the meaning of its earlier
history and to recognize !the dangers that beset it in its infancy, it is
necessary to glance briefly at the state of credit in the country prior to
the Revolution. On the break-up of the feudal system, it became
inevitable that, once soldiers needed to be paid and war-material
purchased, the charges of the government during a period of war should
be largely in excess of its revenue in time of peace. The deficit was
eventually raised by contributions paid by individuals, sometimes by
taxes, sometimes in other ways, but it generally happened that there
was an interval between the date when the money was required and that
at which it could reach the Exchequer ^ Not only were the revenues
anticipated in time of war but, when the personal expenses of a
sovereign such as Charles II. were large and variable, they were also
anticipated in times of peace I The ready money was provided in '
several ways. First of all the goldsmiths, the early private bankers,
were in possession of cash or bullion which they lent — at a very high
rate, sometimes as much as forty per cent. Then there were the
early chartered companies, such as the Russia, the East India, the
Merchant Adventurers, and Levant companies. All of these, when they
had spare capital, and often when they could ill afford it, wei'e forced to
prove themselves "profitable to the State" by providing money at
short notice in large amounts. Thus, besides being trading organiza-
tions, they were also, much against their will, financial institutions
providing the government with loans for short periods. There were
also minor expedients such as the farming of the taxes, the exaction of
a lump sum for the renewal of charters, from both corporations and
companies, and for grants of patents to individuals.

^ Cf. infra, Division xv.

2 Vide supra J Part i.^ Chapters xiv.-xvi.

200 The Bank of England [div. x.

The fact that trading bodies were forced to become temporarily
financial institutions was a heavy handicap to the commerce of the
country. Capital was violently withdrawn from trade, so that the
working resources of many undertakings fluctuated seriously, altogether
irrespective of the requirements of the businesses. This was an evil
that made the process of recuperation after any war slower than it
need otherwise have been. Therefore, one of the great wants of England

enuring the seventeenth century was the specialization of financing the
overnment by an independent institution that did not engage in trade.
It follows that an English bank was required that would be primarily
the agent of the government in providing capital as required. Arising
out of such functions would be the lending of money to merchants;
and, by the mitigation of the irregularity of government borrowings,
gi-eat scarcity or a glut of trading capital would be avoided, and interest
would fluctuate less violently. The writers of the seventeenth century
quote the excessively high rate of interest (caused in a large measure by
sudden diversions of capital from trade), but it is to be remembered
that such movements must have had a reflex action, though in a less
degree, and if interest was sometimes mmecessarily high, it was at other
periods unduly low. For instance, some years prior to 1681, the East
India company could borrow more money than was required at three per
cent. — a lower rate than any modern shipping company can borrow
on debentures ^

Then foreign trade was greatly impeded by the high and irregular
rate of foreign exchange. This was attributable in part to the bad con-
dition of the coinage, and it was to remedy such a state of affairs that
the celebrated Bank of Amsterdam had been founded in 1609. This
institution credited its correspondents with the specie- value of any coin
lodged with it, so that a merchant knew exactly how much was to his
credit at Amsterdam to answer any liabilities falling due there.
Whereas, if he had had to remit coin for each transaction, it would
always have been a matter of considerable uncertainty how many of
a certain denomination of English coins would be required to pay
his debt, since such coins, through clipping, varied materially in
weight.

In view of such facts, it had long been proposed in England that
a bank should be founded to give merchants advantages similar to
those enjoyed by their competitors in foreign countries. As early as
1646 an elaborate scheme was published by John Benbrigge. He
suggested the foundation of two distinct kinds of bank — the one called
mo7is pietatis, the other mons negotiationis. The latter was to be " a

1 A Collection of Letters for the Improvement of Husbandry and Trade, by John
Houghton, 1681, i. p. 149.

Div. X. § 1] Early English Banking Schemes 1646-61 201

bank of trade, i.e. such a sum of money as should always be ready and
able, on good security, to lend on usury to such, as in their trading,
shall have occasion to borrow." Two methods are indicated by which
the proposed bank could secure capital. The one, which is styled mons
recuperationis, where the subscriber accepts for his capital an annuity of
a fixed amount, terminable at his death. The other system is an out-
line of the principle of joint-stock banking, which is called mons Jidei,
except in so far as it appears that a fixed dividend of seven per cent,
was contemplated, a proposal which shows that the fluctuating nature of
banking profits was not understood^ — unless indeed it was contemplated
that the proposed bank should have a monopoly, and that the existence
of a moderate maximum dividend would operate for the protection of
borrowers, in tending to keep the rate of interest low, just as the
" maximum dividend " of the early gas acts of the nineteenth century
was at first supposed to afford adequate protection to consumers. Other
attempts to repair the losses of the Civil Wars, by the extension of
credit, may be found in the proposals for a bank of exchange in 1650^
and of Samuel Lambe in 1658^ Again in 1661 Sir Gilbert D'Ouvilly
proposed the foundation of a bank of exchange, which was to have a
large stock, " with a coinage of his own called bank-money."" It is
significant of the temper of the time that the scheme provided that the
government should be ^' fitting^'' "so as to remove all jealousy of its
falling into the hands of those who hold the militia^" Another pro-
posal of the same date supplements the former by outlining the formation
of banks for making loans.

The stop of the Ex<;hequer in 1672 by Charles II., with the con-
sequent embarrassment of some ten thousand families^, again directed
attention to the question of a proposed joint-stock bank. Though
there were many private bankers of very high repute, several of these
businesses at the time were carried on in a highly speculative manner.
The conduct of one such undertaking — that founded by Richard
Thompson in 1670— will illustrate the dangers to which depositors were
subjected. Thompson soon took several other persons into partnership
with him, and the firm became known as Thompson and company. He

1 Usura Accomrmdata; or a Ready way to rectify Usury..., by J. Benbrigge: re-
printed in The Writings of William Paterson, edited by S. Bannister, London, 1858,
II. pp. 311-17.

2 State Papers, Domestic, Inter., ix. 64; Calendar, 1650, p. 182.

3 Seasonable Observations humbly offered to his Highness the Lord Protector, by
Samuel Lambe of London, Merchant— Certain Proposals for establishing a Bank at
London, by Samuel Lambe in Somers' Tracts (1751), x. pp. 164, 180.

4 State Papers, Domestic, Charles XL, xl. 131 ; Calendar, 1661-2, p. 78.

5 Defoe makes the number of distressed families 20,000— The Consolidator : or
Memoirs of Sundry Transactions from the World in the Moon, 1705, p. 75.

202 The Bank 0/ England [dit. x

§ll

with his partners formed "a society amongst themselves," and in the
short space of five and a half years, they managed to embark in ventures^
in the wine, silk and Russia trades, besides taking interests in inter«^
loping expeditions to India, in mines, in Irish manufactures and in
dealings in exchanged It is scarcely necessary to add that, when a run
came in 1675, the " bank " could not stand it, and was forced to suspend
payment.

There is something of poetic justice in the fact that, although
Charles II. evaded his obligations towards his creditors in 1672, when
he found it necessary to seek financial assistance at a later date, he had
to pay for the discredit he had caused by offering as much as thirty per
cent, interest. Not only so, but, owing partly to the high price of
advances, partly to the extravagance of the Court, anticipations of
the revenue became common, so that a great part of the revenue of
the Crown at length came to pass through the hands of the bankers*.
Again, the trading capital of the country was depleted, and on this
occasion the merchants determined to help themselves by founding a
" National Bank of Credit." The scheme was proposed in 1676^, with
the object of lending money to merchants on the security of their
goods : whereby it was believed that tradesmen " in raising a credit
on their dead stock, could employ their servants and increase their trade
instead of selling at a loss^" In 1681 and 1682 this bank, which was
then in operation, charged six per cent, interest for loans, which sum
was inclusive of warehousing charges ^ By 1683, if Anderson's date
may be relied upon, the bank, " though it had made a mighty stir for
a time, came to nothing^" The failure of this scheme, added to the
suspension of private bankers from time to time, made the problem of
the improvement of credit all the more urgent, since it was calculated
that, up to 1694, the depositors of the goldsmiths and scriveners had
suffered to the extent of between two and three millions ^

Although "the Office of Credit" proved ineffective, its existence

1 The Case of Richard Thompson and Company, London, 1678 (Brit. Mus.
1417. h. 42), pp. 3-6.

2 Bank Credit; or the usefulness and security of the Bank of Credit examined in a
Dialogue between a Country Gentleman and a London Merchant, 1678.

3 Proposals for the Advancement of Trade upon such Principles as must necessarily
enforce it, by R. Murray, 1676.

* Bank Credit, ut supt-a; '^^ England's Interest, or the Great Benefit to Trade of
Banks or Offices of Credit in London" — State Papers, Domestic, Charles 11. ,
ccccxxxvm. 31.

^ A Collection of Letters, by John Houghton, ut supra, i. p. 140.

^ Annals of Commerce, iii. p. 92.

7 A Short Account of the Bank of England, by Michael Godfrey, Somers' Tracts
(1748), II. p. 689.

Div. X. § 1] Financial Stringency 1692 203

showed that the demand for an important bank was growing^ Every
argument that could be urged in favour of the project before the Revo-
lution held with increased force afterwards. The new government
literally did not know where to turn for money during the first years
of the reign of William III. Members of the ministry were forced to
make frequent pilgrimages into the City to borrow, as they could and
at almost any price. A contemporary writer gives the following
description of the state of the credit of the government — " The funds
were run down, the credit jobbed away in Change Alley, the King and
his troops devoured by mechanics and sold by usury, tallies lay bundled
up like Bath faggots in the hands of brokers and stock-jobbers. The
Parliament gave taxes, levied loans, but the loans were at the mercy of
those men (the jobbers) — and they showed their mercy indeed by
devouring the King and the army, the Parliament and indeed the whole
nation — bringing their great Prince sometimes to that exigence, through
inexpressible extortions that were put upon him,... that the regiments
have been uncloathed when the King has been in the field, and the
willing brave English spirits, eager to honour their country and follow
such a King, have marched even to battle without either stockings or
shoes, while his servants have been working every day in Exchange
Alley to get his men money of the stock-jobbers, even after all the
horrible demands of discount have been allowed and at last scarce 50
per cent, of the money granted by Parliament has come into the hands
of the Exchequer and that late, too late for service and by driblets 2."
Omitting the exaggeration of this picture, it must be admitted that it
contains a foundation of fact. It has already been shown how great
had often been the straits of previous sovereigns in war-time for funds',
and the position of William III. after the Revolution was much more
unfavourable. The change of government had involved a shock to
credit, and besides the great joint-stock companies were unable to lend
money. Thus the security was worse, and the usual sources of loans
were closed: so that it was probably true that in 1692 money could
only be raised "by driblets." Parliament was therefore forced to offer
sufficient inducements to tempt the owners of capital to subscribe

1 "Public Banks are of so great a concern in trade that the merchants of
London, for want of such a bank, have been forced to carry their cash to goldsmiths
and have raised such a credit upon goldsmiths' notes, that they pass in payments
from one to another like notes upon the bank ; and, although by this way of credit
there have been very vast sums of money lost not less than two millions within
five-and-twenty years, yet the dispatch of trade is so great by such notes that the
credit is still in some measure kept up "—A Discourse of Trade, by N. Barbon
(ed. J. H. Hollander, 1905), p. 19.

2 Quoted by Francis, History of the Bank of England, i. p. 59.

3 Vide supra. Part i.. Chapters ii., v.

204 The Bank of England [div. x

funds in considerable sums. Evidently it would be necessary to give
any body of persons providing capital, in circumstances of such risk,
not only a high rate of interest but also some other substantial privilege.
Now the rights of a corporation were greatly esteemed ; and, from the
point of view of the government, the granting of a charter of incor-
poration would have the advantage of securing the subscription of a
large amount of capital at one time. Ideas such as these became
diffused amongst the "Committee appointed to consider means for
raising funds to carry on the war" which reported on January 18th,

1692. Offers of any large sum, as a loan, were made subject to the
right of the subscribers to circulate paper money. The two most im-
portant proposals emanated from William Paterson on the one hand
and Hugh Chamberlain on the other. Paterson and his supporters had
proposed to raise ^1,200,000, of which =£^1 ,000,000 was to be lent to the
government at six per cent, with =£^5,000 a year for management, and the
remaining ^£^200,000 was to constitute the capital of a proposed bank,
" the bills of which should be current." The last clause suggests that
the syndicate aimed at a banking monopoly ; and, in any case, the
Committee interpreted the proposal in this sense and referred the pro-
position back to the promoters of it, remarking that it could not entertain
any proposition that involved the forcing of bills on persons without their
consent. Paterson thought the scheme could be modified accordingly,
but his supporters were not, at first, willing to do so^ Chamberlain's
scheme proposed the issue of an inconvertible paper currency, based on
landed-security. Though a committee of the House of Commons
reported in favour of this project in 1693, the whole assembly re-
jected it in that year. Judging from the methods of the Land bank,
Chamberlain could only have made his loan to the State in his own
bills, and the question of depreciation had to be considered ^ In
addition to the merits of the case, there was the influence of the existing
political situation. The idea of a land bank would appeal to the
landed-interest or the Tories, while on the contrary Paterson's scheme,
being addressed to the " monied-men," would claim the support of
the Whigs. As often happens, it was in all probability neither the
abstract merits of the respective schemes on which they were judged,
nor yet on party lines, but on a mixture of both. Towards the end of

1693, the need of money became more pressing ; and, though offers had
been made, no funds had actually been secured. Paterson again came for-
ward with a revised proposal, which provided for a loan of ,^^1, 200,000 to
the State at eight per cent., and for the incorporation of the subscribers as
a bank. The need for money being great, this offer was accepted, and

1 Journals of the House of Commons, x. p. 621.

2 Ibid., X. pp. 22-80.

Div. X. § 1] Foundation oj^ the Bank 1694 205

in 1694 a series of clauses were inserted in the " Ways and Means
Bill" of that year, which authorized the founding of the Bank of
England \

Thus the Bank, unlike the East India and Royal African companies,
came into existence with parliamentary sanction. The act of 1694
provided that persons, who would subscribe ^6*1, 200,000, at eight per cent,
with an additional d£'4,000 a year for the management of the fund
should, on the completion of one-half of the subscription, be entitled
to receive a charter from the Crown, incorporating them as the Governor
and Company of the Bank of England. To prevent the possibility of
the "engrossing of the stock," it was enacted that no person should
subscribe more than ^10,000, nor could he hold more than dg'SOjOOO stock.
The Bank, when established, was precluded from owing more than the
amount of its capital, on a penalty of the individual stockholders
being liable for thrice the excess so lent, nor could it trade in any
goods, wares or merchandize. It was authorized however to deal in
bullion and bills, to issue notes and to lend money on the security of
merchandize.

The subscription lists were opened on June 21st, 1694. Liberal
discounts were allowed for early subscribers, and on the first day
.^300,000 of stock had been applied for. Within the following two
days more than this amount had been taken up, so that by June 23rd the
subscribers had fulfilled the condition entitling them to a charter. By
July 2nd the whole authorized capital had been issued, and on July 24th
the charter was signed.

The charter provided for the internal management of the affairs of the
Bank. Hitherto the officials, who were subordinate to the governor, were
described as " assistants " or " committees." Now, probably under the
influence of Paterson, they are named "directors 2." The members of
the company were authorized to elect a governor, a deputy-governor
and twenty-four directors, of whom thirteen constituted a quorum, of
which the governor or deputy-governor must be one. The qualification
of the governor was the holding of at least <^4,000 stock, that of the
deputy-governor at least ^^3,000, and of a director at least d^2,000. There
had been considerable discussion as to voting rights in the East India

1 Will, and Mary^ cap. 20.

2 The same title was used in the following year by the Darien company^ which
was also promoted by Paterson, vide supra, ii. p. 208. The term ^^ director" in
this signification came into use in the first quarter of the seventeenth century.
Thus the officials of the Russia company, described as assistants in the charter,
were sometimes spoken of as directors. Again the Joint-stock of the Virginia
company (which was proposed for importing tobacco) was to be under the control
of a director, vide supra, ii. pp. 50, 277-

206 The Bank of England [div. x.

company^, and those, who maintained that a few large stockholdei
influenced the whole policy of that company, had obtained so much
support that it was arranged that no one should have more than oiie
vote whatever stock he owned, and the minimum holding for a vote was
^500. It was also provided that dividends could only be made from
the income received from the State and from profits. As in the act,
the company was determinable on one year's notice after August 1st,
1705, on the repayment of the loan of J'l, 200,000 with all arrears of
interest, if any 2..

The history of the Bank of England from 1694 till the end of
1697 is of very great interest. It has been told with great detail by
Thorold Rogers, so that it will only be necessary to summarize the
leading events with the addition of certain transactions, which are
requisite for a right understanding of an exciting three years of
financial history ^

Although .^1,200,000 was " subscribed," this amount was not paid up
in full till some years later. Each subscriber deposited 25 per cent, of
the amount, he applied for, during the time the books were open. A
second 25 per cent, was paid up on or before September 27th, and
10 per cent, on or before November 27th. No additional calls were
made for some time, so that the stock remained with 60 per cent, paid
up. Therefore, although c£^l ,200,000 stock was allotted, the instalments
called by the company brought in only ^720,000. This left a deficiency
of exactly half a million to be provided, to complete the loan for the
government. Payments had been made by the Bank to the Exchequer
of .g'300,000 about August 3rd, and a second .^300,000 about
September 27th — thus transferring the calls of the stockholders as they
were received. Meanwhile banking was being prosecuted vigorously,
and in December the remainder of the loan was paid — part being
provided by the call of 10 per cent, in November and the remainder
out of the banking funds*. The eflfect of this operation was that the

1 Vide supra, 11. pp. 153-8.

2 The Charter of the Bank of England, printed in The History of Banking, by
W. J. Lawson, London, 1850, pp. 448-64.

3 The First Nine Years of the Bank of England, by James E. Thorold Rogers,
Oxford, 1887. '^ The Statement showing the Capital of the Bank of England from
1694 to 1897 prepared by Mr J. F. Stutchbury under the authority of the Governor,"
and printed in The History of the Earlier Years of the Funded Debt from 1694 to 1787^
London, 1898 (Blue Books [c. 9010]) is an admirable piece of work. I am also
indebted to Mr Stutchbury for his extracting for me from the records of the Bank
the dividends paid till 1720. This list {vide Summary of Prices of Stock and
Dividends, p. 243) corrects that of Francis printed in History of the Bank of
England, 11. p. 267.

* Earlier Years of the Funded Debt, p. 67.

Div. X. § 1] Only ^Oper cent, paid up on Stock 1695 207

stockholders had found dg'720,000, and they were receiving interest
on J*l ,200,000 at 8 per cent., so that the payment made by the
government would have provided a dividend of 13 J per cent., sub-
ject to the cost of obtaining the half-million, not raised from share-
capital.

It would be idle to criticize this method of finance by modern
standards. Capital was scarce, and what had escaped the demands of
the government had gone to float the many industrial ventures that
were prevalent at the time. Probably it would have been difficult, it
might even have been impossible, to have obtained payment in full
from the stockholders, and some such inference is suggested by the
call of November being one of 10 per cent, instead of 25 per cent, as
before. Even the knowledge that this small payment was impending
was sufficient to depress the price of the stock. In fact the course of
quotations during the year 1694 is most instructive. Houghton first
mentions Bank stock on August 17th. On August 15th and also on
the 22nd the price quoted was 102. The next week it was 101. Then
for three weeks 100, for a fortnight 101, and for three weeks again 103.
These figures may be interpreted as " from par to 3 premium,'** since on
October 30th the quotation of 57 is given "on the money paid in,"
i,e. a premium of £1 on the ^50 then called up. The price fluctuated
between 57 and 61 for a month, and the apparent rise to 70 on
November 28th is attributable to the inclusion of the 10 per cent,
call in the price. It soon became known that further calls were not
to be anticipated, and the price rose during December from 70 to 76.
In the year 1695, the first quotation was 74; and, by the end of
January, 90 had been reached. In view of the announcement of a
dividend of 6 per cent., paid on March 25th, the price was 99 on
March 20th. The apparent fall the following week is really due to the
stock being " ea^ dividend," and it was not till June 26th that 99 is again
quoted. Between August and the end of September, fluctuations were
very small, only from 94 to 98, and in October the deduction of the
second dividend of 4 per cent, (making 10 per cent, for the year) left
the price nearly constant. In December there was an abrupt rise from
94 to 100. This continued in the first weeks of January 1696 until
108 was quoted on the 8th, after which there was a rapid decline to 83
on February 12th, on the "passing of the dividend" and other un-
favourable circumstances. After a temporary revival, the fall continued,
and the price was 82 on March 18th. It kept fairly steady, in spite of
the run of May 6th, but afterwards it gave way rapidly, till by the
middle of October 60 was quoted. This was the lowest point of the
year, and it was followed by an improvement, which however was only
temporary.

208 The Bank of England [div. x.

The causes which brought about a fall in the price of Bank stock
from 108 to 60, and that precluded the payment of a dividend in 1696
are worth studying, if only as showing the peculiar dangers to which
the institution was subjected in the first years of its existence. The
Bank of England had come into being as a result of a period of
industrial activity, and it had to pay the penalty of its origin.
Immediately its success seemed to be probable, new bank schemes were
brought forward. In 1695 a money bank was proposed, a bank "of
paper-notes of credit,*" a London bank, promoted by the City magis-
trates, which a contemporary writer described as " bound to miscarry,
because the conduct of the Chamber was so bad that the City was
without credits" Besides these proposed banks there were two actually
founded, one the Orphans'" bank, connected with the Orphans' Fund-,
which was said in 1695 " not to have the shadow or substance of real
good'' and the other the Million bank'. A more dangerous rival than
either of the latter was the Land bank. This scheme had been con-
sidered as an alternative to the foundation of the Bank of England, and
had not been accepted in 1694 ^ But in 1696 it appeared to Parlia-
ment, or perhaps rather to the ministry, that the Bank of England had
raised what money it could, and that other sources of loans must be
sought. Besides, the Bank of England was a Whig institution, and the
Tories still hankered after a land bank. Therefore, when early in
February the House of Commons had voted in favour of establishing a
land bank ^, there followed the serious fall in Bank stock already noticed.
This however was only the beginning of the misfortunes of the Bank of
England. The government, after making it the agent for effecting the
calling in of the old coinage and the issuing of the new, treated the
court with a remarkable want of consideration. The clipped money
had been called in by May 4th, 1696, but the Bank had not received
the new coins in sufficient quantities from the mint. On May 6th a
run was made on the Bank ; and, owing in a large measure to the neglect
of the government, it was forced to suspend payment of its notes in
cash. Arrangements were made to pay a part of any notes presented
in cash and the remainder as soon as coin could be obtained from the
mint. Thus the notes ceased to be convertible; and, although the
Bank undertook to pay interest, they soon were at a discount, some-
times of as much as 20 per cent. To meet these adverse circumstances,
it was proposed in May to call up 20 per cent, on the capital, but this
scheme was merged in another by which the proprietors advanced the
money to the Bank as a loan.

1 Anglice Tutamen, pp. 11-15. ^ Vide supra, pp. 12, 54.

3 Vide infra, Section 4 of this Division. * Vide supra, p. 204.

^ Vide infra, Section 2 of this Division.

Div. X. § 1] The Crisis of 1696 aiid its Effects 209

When the crisis had been occasioned in part by the remissness of the
government, it is somewhat curious to find the Bank being approached
on August 15th, 1696, to lend ^£^200,000 to the King " in the present
exigency/' At the same time the governor and proprietors were informed
" that they were now assured of all the encouragement and support the
government could give them, and that, as a mark of it, divers great
men had given orders for the buying of Bank stock and that some have
already bought \'' In spite of this support to the market in the
company's stock, the price continued to fall. It had been 70 in the
middle of August and, under rumours of a call, it fell to 60 in October.
This call was fixed at 20 per cent, and was payable on or before
November 26th. Therefore the prices, quoted in the end of that month,
are for the stock with £H0 called up, that recorded on November 18th,
80, being exactly par. During the remainder of the year the quotation
declined, the last price, on December 22nd, 73, being considerably
below par.

During the end of the year 1696 and the first half of 1697, the
credit of the government was very low. The pressure of the war began
to be felt, and money became scarcer and scarcer. " The ministry,"
Davenant writes, " was like a distressed debtor, who was daily squeezed
to death by the exorbitant greediness of the lender. The citizens began
to decline trade and to turn usurers^.*" In these circumstances an appeal
was again made to the Bank, which in December 1696 was asked to lend
the government two and a half millions. To have endeavoured to
comply with this demand would have meant the most serious con-
sequences for the Bank. Its notes were at a discount of \6\ per cent, to
17 per cent., and the call of 20 per cent., made in October, had only
been paid in part. The stock was quoted below par; and, although
on December 4th, 1696, an account was presented to the House of
Commons, showing a surplus of assets over liabilities of <£'^125,315. 2^. lie/.,
the cash in hand was no more than £Q5fiQ^. Is. \0d. It will therefore
be evident that the most the Bank could do would be to maintain
its credit ; and, if possible, to assist the government in any way that did
not involve a subscription or a loan in cash. By January 1697 a way
appeared by which this might be done. One of the great difficulties
of those controlling the national finance was the depreciation of the
government tallies, which were sold at this time at about 40 per cent,
discounts Now, although the government was unable to extinguish

1 State Papers, Domestic, Will. III., 1694 to 1696, No. 231.

2 An Essay upon Loans, 1710, in Somers' Tracts (1748), ii. p. 13.

3 The Consolidutor : or Memoirs of Sundry Tranmctions from the World of the
Moon, 1705, p. 40; ^ short History of the Last Parliament, by — Drake, M.D., 1699,
in Somers' Tracts (17-50), viii. p. 180; An Essay upon Loans, 1710, Ibid., ii. p. 13.

S. C. III. 1"^

210 The Banh of England [div. x. §

the tallies, it was in a position to pay interest to anyone who could
hold these tallies ; and, if they were taken off* the market, the credit of
the State would be improved. On the other hand, the Bank could not find
the capital to discharge the tallies, but its credit remained sufficiently
good to deal with them by another method. It was proposed, in
January 1697, that the capital of the Bank should be temporarily
increased, and that payment for the amount subscribed might be made,
as to four-fifths, in tallies and, as to one-fifth, in bank-notes. But
there still remained one difficulty to be surmounted. The existing
stock had only eighty per cent, called up, and there were surplus assets
in hand. It would have been highly inequitable that new subscribers
should be allowed to come in and pay their subscriptions in a depre-
ciated security, while sharing in the reserved profits. It was therefore
provided, by the Act 8 and 9 Will. III. cap. 20, that on or before
June 24th, 1697, the surplus should be dealt with as follows. First,
the holding of each of the proprietors should be credited as fully
paid up, and then any amount, still remaining, was to be divided to
them. This system, while almost unavoidable in circumstances of
peculiar danger, was a result of an utterly vicious principle of finance,
which was prevalent during the reign of William III. It was supposed
that the normal type of joint-stock company was one which resembled
the early form of the capital of the East India company, which was
to be periodically wound up to be followed by a new subscription ^
This idea arose from the financing of trading voyages and was justifiable
as long as such undertakings were monopolies, and there was no free
market in the stock. But after the Revolution anyone, who wished to
purchase an interest in the larger companies, could have his order
readily executed, so that there no longer remained any reason for
the winding up of a stock. Further the disadvantages were great.
This method precluded the formation of a strong reserve fund, which
was necessary, when trading of all kinds was subject to great risks. So
that, possibly with the best intentions, the government, by sanctioning
this policy in the cases of the East India company and the Bank of
England, was making commerce more speculative than it need have been
and was adding to its own difficulties.

These facts enable one to interpret the quotations of Bank stock
during the first seven months of 1697. Persons, who were in default in
paying the call of 20 per cent., had to sell some stock, and there were
no buyers at the prices which had been quoted in December. A little
consideration will show the reason of the fall. The existing stock,
which was then ^^80 paid, varied between 80 on November 18th, 1696,

Vide supra, u. p. 97.

Div. X. § 1] Issue of the Engrafted Stock 1697 211

and 73 in the last fortnight, in December. Now the surphis assets
might make good the 20 per cent, still outstanding ; but, on the other
hand, a call might have to be met. Once the terms of the issue of new
capital were made known, it became evident, taking tallies at 40 per
cent, discount and bank-notes at 17 per cent, discount, that about £65
in cash would purchase tallies and notes enough to pay for ^100 of the
new fully paid stocks So that in fact, since Bank stock was at par in
November 1696, the price had to be readjusted to allow for the discount
on tallies. In other words, that discount was transferred from the
tallies to Bank stock. Indeed, in view of a possible additional call, it
even went further, and the old J'SO paid stock fell to 55 for cash on
January 20th ; and, in the first fortnight in February, it touched 51 for
cash and 62^ for payments in bank-notes — this being the lowest price
of the year. Afterwards, there was a slight rise, which reached 61 on
June 2nd, followed by a fall to 60J in the following week — both prices
being for cash. Houghton continues this quotation until September 3rd,
and it is probable that the books were closed, pending the calculation of
what was due to the old proprietors. The result turned out to be very
favourable, allowing the payment from reserve of the 20 per cent., required
to make their stock fully paid, and in addition a distribution of £S. 10s.
per cent., both of which had been paid by July 24th, 1697. The effect
of this readjustment does not appear in the price of the stock till
September, when the conclusion of peace gave an impetus to the market.
On September 8th the quotation was 82, and the following week it had
risen to 98, so that practically the whole of the discount on the tallies
and bank-notes, taken in payment for the new capital, had now been
recovered.

In concluding this early stage in the career of the Bank, it will not
be unprofitable to touch briefly on its policy and the position of the
stockholder. The author of AngUoo Tutamen^, writing in 1695, condemns
the enormous dividends paid by the Bank, but during the three years
prior to the re-arrangement of its capital, it had only paid 10 per cent,
in 1695 and, as ordered by act of Parliament, 23i per cent.^ on June 24th,
1697. The position of an original stockholder, who had subscribed for
.^100, might be described as follows. He had paid ^80 for the stock,

1 Payment might be made as to four-fifths in tallies and one-fifth in bank-notes.
Tallies were at a discount of 40 per cent., bank-notes at a discount of 16| per
cent, to 17 per cent. Therefore of the payment for £100 stock, £80 was subject to
a discount of 40 per cent, and £20 to a discount of 16| per cent, to 17 per cent.
So £48 cash would purchase £80 tallies and about £17 cash £20 in bank-notes.
Thus about £65 cash would secure the specified proportions of tallies and notes.

' p. 7.

3 This is the dividend for 1697 up to the re-arrangement of the capital. Later
in the year 4 per cent, was paid making a total of 27| per cent.

14-2

212 The Bank of Engla7icl [div. x.

credited him as fully paid by the bonus of 1697. Taking the high(
price after the declaration of peace, namely 98 on September 15th, he
would have a profit of 18. To this are to be added the remaining
dividends, namely 10 per cent, on ^60 paid up {i.e. £Q) and 3J per cent.,
making =£*9. 10^. Adding together the possible profit and the dividends,
a total gain of £9^1. 10*. on £S0 is obtained, or an average annual
increase of over ^9, representing about 11 J per cent, annually. Making
a similar estimate with the lowest subsequent price in 1697, namely
86f on November 24th, the increase in capital value would have been
only 6 1, which, with the addition of the dividends paid in cash as
before, would give a total appreciation over the three years of 16^ or a
little over £5 annually on the original £S0^ or an average annual
increase of not quite 7 per cent. So that, taking account of the market
price in the last four months of 1697, the position of a stockholder was
that he might have retired from the company with a nett average
annual appreciation on his investment of between 11^ and 7 per cent.
It will thus appear that the Bank had so far been ill-rewarded for the
services it had rendered to the government ; since, although the dividends
declared amounted to 33J per cent, for the three years, 20 per cent, of
this was paid in stock, and the forcing the Bank to receive depreciated
tallies, by reducing the price of the stock, reduced also the amount of
this 20 per cent, bonus in stock.

From the point of view of the general policy of the Bank as a whole,
this period of three years was one in which unexampled difficulties had
been successfully overcome. It is true the Bank, whether through want
of experience or compelled by necessity, had made one serious mistake,
namely the contracting of the calls paid up on its stock, and making
good half a million of the loan to the government out of funds em-
ployed in banking. This meant that at the least 40 per cent, of the
deposits and other loans was locked up and could not be made available
— unless by a call on the proprietors as had to be done in 1696. What
made this device so serious was that it was the same policy which was
later adopted by the South Sea company with most disastrous results in
1720, namely the issue of much less of the company's securities than
the amount of the government debt due to it. Closely connected
with this system of finance was the over-issue of notes, which showed
itself by the discount that was charged during the time of the
suspension.

Apart from these errors, which after all were probably incident to
the state of credit and knowledge at the time, the success of the Bank
was remarkable. It had to support an embarrassed and ungrateful
government, and to find money for it, after it appeared that capital
could scarcely be obtained on any terms. The Bank succeeded, not only

Div. X. § 1] Profits and Policy 1694-7 213

in financing a tedious war, but in lowering the rate of interest at home
and the exchange abroad. The main causes that made for its success
were the impetus given to trade and manufactures by the change of
government, the uprightness of the dealings of the company, and lastly
the thoroughly democratic organization of its internal affairs, under which
the proprietors were taken into the confidence of the court and consulted
as often as any fresh phase of one of the numerous crises, through which
the Bank passed, arose. The consequence was that the stockholders
were loyal to the directors and the company. This meant that they
strengthened the hands of the management, and such a state of affairs
tended, in a large measure, to maintain the credit of the institution.

The ten years from July 1697 to July 1708 constitute a new epoch
in the history of the Bank, of which the most important characteristics
are the political situation and, partly as arising out of it, the change
that had been made in the capital. The Bank had been founded during
a time of war abroad and of keen competition in banking at home. It
was now to experience the benefits of peace and the mitigation of rivalry.
The less stable banking ventures had proved failures, the Land bank
had come to no good result, the Million bank had already, or was soon,
to retire from banking, and the competition of the Mine Adventurers^
and the Sword Blade companies ^ had not begun. It was part of the
prudent policy of the Bank to utilize these favourable circumstances to
strengthen its position by extinguishing gradually the new capital created
in 1697. Such a contingency had been provided for in the Act 8 and 9
Will. III. cap. 20, which distinguished between the original capital and
the new stock, which was then created. The latter was known as " the
Engrafted Stock'' and it was provided that the Bank might pay off*
instalments of this capital, as it received money for the tallies, which
had been handed to it in payment by the subscribers. The government
guaranteed 8 per cent, interest on the tallies outstanding, so that the
Bank was receiving 8 per cent, on the loans made to the State, against
which it had issued its own stock. This act also provided that no other
corporation, numbering more than six persons, might set up banking in
England. The company could not be determined before August 1st,
1710. The stock of the Bank was made personal estate and was exempt
from taxes. No contract for the sale or purchase of stock was valid,
unless registered within seven days in the books of the Bank. As
showing the tendency to provide against the management remaining too
long in the same hands, it was enacted that not more than two-thirds of
the directors, retiring in any one year, might be elected in the next or
succeeding year.

1 Vide supra, ii. pp. 451-3.

2 Yi^ infra, Division xii.. Section 3 b and c.

214 The Bank of England [div.

According to this act, subscriptions for the new capital were
received up to June the 24th, 1697, and in all i?l,001,171. 10,9. was
subscribed. This, added to the original capital, made a total of
^.^2,201, 171. \0s. Of this the engrafted stock was subject to repayment
by the company, the original capital of d^l ,200,000 could only be repaid
by the State.

It has already been shown that, from the middle of September 1697
till the end of the year, the price of the stock (now fully paid) fluctuated
between 98 and 86f . The first dividend, on the increased capital, was
paid on December 25th. It amounted to 4 per cent., representing half
a year's payment of the interest received from the government. The
price of the stock on December 22nd was 89, and the quotations, in the
flrst fortnight of the following January, 86 1 and 86 are accounted for
by the stock being ex dividend. The revelations, as to the forgeries of
Exchequer Bills early in 1698, kept the price low, and there was the
uncertainty concerning the future of the East India trade. So, in the
first quarter of the year, the extreme fluctuations were between 86 and
89J, the most frequent prices being from 86J to 86|^. Evidently the
news of the foundation of the New East India company was favourably
received in the stock market, for from the end of April, Bank stock was
over 90. With the exception of two occasions, the one on May 4th
when the price was 95, and the other on July 6th when it was 94,
quotations from the end of April to July 13th remained between 91 and
92J. By the middle of July, it became known that a fairly favourable
dividend might be expected in September and that a commencement
would be made in paying off* the engrafted stock, and the price rose to
94^ on July 20th, to 96f on August 10th and finally to 97i on August
24th. It remained at the latter point till September 7th, after which
date the dividend was deducted. It may perhaps be noted that this
quotation only differed fractionally from that recorded a year before.
The dividend, paid in 1698, was a cautious one, and is chiefly remarkable
as inaugurating the beginning of the return of their capital to those who
had subscribed for the engrafted stock. It is true that the amount paid off
was very small, only \Qs. 9^r7. per cent., but it marked the commencement
of a process that was steadily continued. The dividend proper, ix, that
made from profits, was £Q. ^s. 2^c/. per cent., and the two payments
together made a total distribution of 7 per cent, to those who owned
proportionate amounts of the original and engrafted stocks.

As already noticed, the stock market in the seventeenth century had
scarcely arrived at the stage of " discounting the dividend,^' and so,
immediately the payment was made, the price suffered proportionately.
Thus, on September 7th, Bank stock cum dividend of £1 was at 97^^,
and on September 21st it was 96J. When quoted ex dividend in the

Div. X. § 1] Rise in the Price of the Stock 1698-9 215

following week, the price was 90. Throughout the remainder of the
year the price advanced without a single reaction, until 103 was reached
at the end of December, making a gain of 17 during the year, but of
this 13 had been marked in the last four months.

The whole of the year 1699 and the greater part of 1700 were very
prosperous. The harvests were good, trade was flourishing, and, for the
times, politics were not unsettled. These favourable circumstances were
reflected in the price of Bank stock. It was first quoted in 1699 at 103,
but during the rest of the month of January there was a slight relapse ;
owing, as Luttrell says, to several persons having closed their accounts
with the Banki. It is probably to this cause that the fall to lOlf on
the 25th is to be attributed, that being the lowest price of the year.
This relapse was only temporary, and by the end of February the
quotation was steady at 104. The declaration of a half-yearly dividend
of 4^ per cent., this time without any repayment of engrafted stock,
i.e. exclusively from profits, was favourably received. From the middle
of April till the end of June fluctuations were very slight, only from
103| to 105^. By the middle of July the prospects of a second favourable
half-yearly dividend, which was this time 5 per cent., making 9^ per
cent, for the year, led to a fresh improvement in the market. For
the three weeks from July 19th to August 2nd the price was 107, the
next fortnight it rose to 108f , on August 23rd it was 109 J, the next
week llOi, then for a fortnight 113 and finally on September 20th, 119.
Afterwards there was a slight fall, but not equal to the deduction of the
5 per cent, dividend paid on September 20th, and by November 10th
the quotation was 118 and the market continued to record transactions
between that price and 115 till the end of the year, closing in December
at 117|^. The difference between the lowest and highest prices recorded
in 1699 represents a gain of 17^, which compares with an increase of 17
in the previous year.

The first quotation in 1700 was 126; and the advance, that followed,
was accelerated by the announcement not only of a half-yearly dividend
of a very little more than 5 per cent, but also of a return of capital on
the engrafted stock. The two distributions together amounted to

1 Rogers, First Nine Years of the Bank of England, p. 93. Rogers says he caunot
verify this statement of Luttrell's. The statement is that Bank stock fell 2 per
cent, about January 19th. In Rogers' transcription of Houghton's quotations the
price for January 20th is given as 102^, that of the previous week having been 103.
But Houghton quotes prices of the Wednesday in the paper published on the Friday.
Rogers gives the date of the paper as that of the quotation. Therefore the price
printed by Rogers as of January 20th is really that of the 18th. Luttrell is right in
recording the fall as on the 19th since Houghton on Wednesday 25th quotes the
price as lOlf. All through I have given the actual date of the quotation, not that
of the publication of the paper.

216 The Bank of England [div. x. §

5\ per cent.^ The effect of this announcement was to cause the price
to advance to 148 J. This was the highest quotation in 1700, and it
was not surpassed till 1717. With this price of 148^ the progressive
improvement, that had begun in 1697, culminated. It represents an
advance of nearly 200 per cent, on the lowest price of 1697 (51). If the
par for the new subscription be taken at about £Q5 in cash, the appre-
ciation, shown in less than three years, would be 127 per cent. In view
of these facts it can easily be credited that one of the directors. Sir
Gilbert Heathcote, is reported to have made =^60,000^.

The deduction of the March dividend of 1700 accounts for the
reduction of the price of the stock from 148^ cum dividend to 142 ex
dividend on April 24th. The ill-health of the King of Spain and the
foreign complications, likely to arise in reference to the succession after
his death, tended to depress the price of stocks. From May 1st to May
22nd that of the Bank was quoted from 138J to 139. Between May 29th
and June 12th it varied from 141 to 141^. In the next seven weeks
quotations tended downwards from 138^^ to 136|^. By August 7th it
was expected that the September dividend would be a favourable one,
and the stock rose to 141|, relapsing to 138| on August 21st and re-
covering to 142 in the next fortnight. This dividend included a fraction
over 5 per cent, from profits and very nearly J per cent, return of
principal on account of the engrafted stock, making a total distribution
of B\ per cent.^, and a payment for the year of lOJ per cent. The fall
in price from 148^^ in March to 142 in September, although the dividend
was higher on the latter occasion, represents the discounting by the
market of the outlook in foreign politics. After the books were re-
opened, the price was 133, representing a fall of about 3 allowing for
the deduction of the dividend from the price. Three weeks later the
quotation was 129, and Houghton repeats this figure for the following
ten weeks. It is probable that he did not change his quotations, as it
is to be expected that the news of the death of the King of Spain on
November 1st would have made some change in the price, according as
this event had been over or under discounted. About Christmas Day two
transactions at 124 J were recorded, this being the lowest price of the year.

^ The dividend was

The principal returned

Total distribution

2 Francis, History of the Bank of England,

3 I.e. Dividend from profits

Principal returned

Total distribution

£ s. d.

... 5 0 0|

4 llf

£5 5 0

I. p. 80.

£ s. d.
... 5 0 Of
9 111

,, ...

£5 10 0

Div. X. § 1] Price of Stock 1700— Crisis of 1701 217

Throughout the first fourteen weeks of 1701, Houghton prints the
same price, 123. Now this period was a very exciting one in the annals
of the Bank. Thorold Rogers says that he is unable to reconcile the
discrepancy between Houghton's list at this time and the prices mentioned
by Luttrell, unless on the supposition that the latter records time bargains
and the former "bonafde purchases and sales \'' Rogers was misled by
the impression he formed that Houghton quotes only actual cash trans-
actions. But a closer study of his list affords material for correcting
this theory. The prices of stocks and shares in the Colled iofi.s' were
compiled in different ways at different times-. In 1701, the notation
adopted was to print the quotation with a small figure beside itl The
index in this case was 0, meaning that there were no transactions, or in
other words that 123 was bid, but that no business resulted. It is quite
inconceivable that for three months the same offer was made without
effect or without the price bid being modified. Evidently what
happened is familiar to anyone who consults stock -exchange quotations
in the less careful provincial newspapers. The price for Bank stock
was reprinted from the previous issue for a lengthened period, as was the
case with that of the other stocks. For instance the quotation of Old
East India stock remained at 119 (marked as having been twice recorded)
up to February 19th, when it apparently fell abruptly to 76.

This lapse of attention on the part of the editor of the Collcctiom is
to be regretted the more, since the first weeks of 1701 were the most
exciting since the issue of the engrafted stock. The East India com-
panies were in the throes of the struggle that resulted in the union begun
in 1703. The Bank supported the New Company, and the Old Company,
in its campaign, determined to injure the credit of its rival by attacking
that of the Bank of England. The court of the Old Company, assisted
by Duncombe, collected as much cash as they could together, it is said,
but this is improbable, to the amount of a million sterling. They then
obtained some i^300,000 worth of Bank bills. The object of these
manoeuvres was to drain the City of specie, and then to demand payment
of the bank-notes with the expectation that the Bank could not honour
its obligations. This scheme failed and the Bank is said to have delivered
a counter-attack which forced the banker of the Old East India company
to suspend payment^.

1 Rogers^ First Nine Years of the Bank oj England, p. 132.

2 For specimens of these see Plate, vol. i.

2 The price on Jan. 1, 1701, was printed 123 0 q.

* The Villany of Stock Jobbers Detected [by Daniel Defoe], in A Collection of the
Writings of the Author of the True Born Englishman, 1703, pp. 259-61 ; of The
Consolidator: or Memoirs of Sundry Transactions in the World of the Moon, 1705,
pp. 250, 251. The name of the banker who failed is given as ^VilIiam Slieppard,
of. A Handbook of London Bankers, by F. G. Hilton Price, London, 1890-1, p. 151.
Vide supra, ii. pp. 153-76, 183-8.

218 The Banh of England [div. x. § 1

The effect of this brisk financial campaign and the progress of the
war, in which France was engaged with the German Empire, is reflected
in the quotations recorded by Luttrell for Bank stock. On January 4th
he records 122 and by the end of the month the price had fallen to 113.
The attempted run on the Bank took place early in February, and by the
1st of the month the quotation had fallen to 106, a week later there was
a recovery to 110 and by March 6th the stock, according to Luttrell, was
as low as 97. This reaction of about 26 in less than three months shows
that in addition to the dread of war, the sentiment of the , market was
influenced by the necessity, to which the Bank was reduced, of issuing
sealed bills at 6 per cent, interest. This a contemporary writer describes
" as a begging of credit^,*" and it probably made the situation appear
worse than it was. Though the Bank must have suffered from the attack
made on it, the payment of a dividend in March of 4| per cent, would
not have been made, had it been severely shaken. By April 9th,
according to Houghton, the stock was quoted at 103^ and Luttrell gives
a price of 110 on the 17th. On May 7th 111 J is recorded by Houghton,
but the next week and on till June 25th the quotation was 106. On July
2nd the price rose to 112^. Afterwards there was again a reaction, and
the stock only fetched 108 J in the middle of August. On the 20th the
quotation was once more 112 J and, on the announcement of a second
half-yearly dividend of 4J per cent., making 9 per cent, for the year, it
rose to 115 J and subsequently to 118| on September 10th. After the
books were re-opened in October, the first quotation was 109^, and the
price fell away to 107 J, afterwards rising to \\^\ during the last three
weeks of the year, thus reducing the fall for 1701 to 12 J on Houghton's
figures.

Although it was known at the beginning of 1702 that war was
inevitable, the market for Bank stock was stronger. It opened at 114|
and maintained this level till the end of the first fortnight in January.
From the 14th to the 21st there was a slight fall to 113i, this being the
lowest price of the year. The March dividend was 4| per cent., an im-
provement of \ per cent, on that paid in the corresponding half-year of
1701. This raised the price of the stock which was quoted from 117 to
118 from the end of February to the middle of March. Although war
against France had been declared on May 15th, by the 27th the quotation
had recovered the deduction of the dividend, and the price was again
117^. The announcement that 5 per cent, would be repaid, on account
of the engrafted stock on June 24th, increased the quotation to 121| on
the 21st. After this distribution had been made the stock, ex dividend,
was 118i till the end of July. In August the expectation of another

^ The Villany of Stock Jobbers detected, ut supra, p. 261.

Div. X. § 1] Repayments of Engrafted Stock 1702-3 219

substantial repayment of capital caused the price to fluctuate between
121 J and 125 J, the latter being recorded on September 9th. The
dividend was again 4f per cent., making 9J per cent, for the year, with
a repayment of 2^ per cent, of the engrafted stock, or a total repayment
in 1702 of 7i per cent. Since only something less than f per cent, had
been returned in 1700, the repayment of 1702 was much the largest yet
made, and the stock was very steady during the remainder of the year
reaching 129 on December 9th, and closing at the end of the month
at 128f .

In 1703, although the country was at war, the price of the stock
went steadily up from January 20th when it was 126, after being 129
on the 6th. The reason for this apparently anomalous movement was
the large repayment of the engrafted capital made in this year. With
the March dividend of 4f per cent., 2| per cent, of the capital was
returned. On July 13th an extra payment of 2 J per cent, was made,
and another of 4 J per cent, with the September dividend. So that in all
9^ per cent, was returned, in addition to the dividend of the same
amount, making a total distribution of 19 per cent. The progressive
improvement in the quotations is explained by these repayments. At the
March dividend-payment the stock was quoted at 129, by June 16th
the deduction of the dividend had been recovered and the price was
129f. The news of the additional repayment in July raised the stock
to 133i, and that in September to 138|.

It is not altogether easy to account for the fact that prices of Bank
stock advanced in spite of the declaration of war and the death of the
King, and maintained that advance. It may indeed be thought that, as
often happens, these unfavourable circumstances had already been dis-
counted and that the actual outbreak of hostilities would naturally bring
the necessary reaction. This may have been so, but if Houghton's
prices can be relied on — it has been shown they are subject to doubt on
at least one occasion — the state of the market does not suggest move-
ments dominated by the rebound from undue pessimism. Had this
been so, the improvement would have been checked from time to time
by frequent relapses. But on the contrary, it began in 1701, and it
may with more reason be assigned to the large repayments of the en-
grafted stock in 1702 and 1703. Even the small sum distributed as the
beginning of this process in 1700 appears to have been one of several
favourable influences in that year.

This however only removes the problem one stage farther back. Why
should these distributions, amounting in all to d£^409,132. 14?. 2d, have
had such a marked effect.? The answer would appear to be twofold.
On the one side stockholders may have had to strain their resources to
pay for the engrafted stock, and the repayment of over 40 per cent, of it

220 The Banh of England [div. x.

came as a great relief to maily. Not only was it a relief, but the repay-
ment was made in cash and represented a handsome profit. Even
already, when about 40 per cent, of the stock was repaid, the subscribers
had received back about two -thirds of the average amount of the capital
they had raised. In the second place, the fact that the government was
able to redeem the tallies showed that its credit was good, and therefore
the expectation was formed that the financing of this war would not be
nearly so difficult as that of the previous one.

In the year 1704 the good fortune, enjoyed by the Bank since the
middle of 1701, ceased, and until 1707 the institution had to battle with
adverse circumstances. In November 1703 a most destructive storm had
visited the English Channel and southern coasts and had destroyed much
valuable property. On the 5th of January Bank stock was quoted at 128 J
and it rose till March 6th when 133| was recorded. In view of the fact
that the court found it necessary to reduce the dividend from profits from
4f per cent, (which had been paid regularly for four half-years) to 4J per
cent., with a return of 3 per cent, capital, this price represents a higher
yield with the reduced dividend. In the next three months the fluctua-
tions were not large, varying between 125 and 130. After the middle
of August the stock rose, on expectations of a satisfactory September
dividend, to between 131 and 130. This time the profits were lower,
and only 4J per cent, was paid, making 8f per cent, for the year (as
against 9^ in 1703) with a return of 4 per cent, on account of the
engrafted stock. The dividend proved disappointing, and the stock was
quoted "without the dividend" on September 22nd at 120 J — the previous
price {cum dividend) having been 128^^ — or a fall of about 4. For the
next month the quotations showed little change, varying between 121
and 120. On October 27th there was a fall to 117^ and on the 30th to
115. This fall on October 30th was due to bad news from abroad and
aff'ected most of the better known stocks. Besides the securities of the
Bank, those of the Old East India company, the African company and
the Million bank, all touched the lowest quotations of the year on that
day. The French armies had now occupied Spain and invaded Germany,
while an insurrection in Hungary threatened to withdraw some of the
troops that were badly needed by the Allies. The fall in stocks had been
considerable, and there were large demands for cash from the Bank. To
meet these, it became necessary again to issue interest-bearing bills, and
the managing committee of the East India trade raised a considerable
sum on bond. By these measures, a crisis that might have become
serious was averted, and the total fall in Bank stock was about \S\ from
the highest point of the year to the lowest. Early in November the
stock recovered to 118, but relapsed to 116 J on the 29th, improving
again to 117:^ on December 15th and to 119 J on the 20th, closing at

Div. X. § 1] Reduced Dividends 1704-5 221

119, thus reducing the fall on the whole year— taking the difference
between the highest price and that last quoted in December—
to 14^.

It often happens that the after-results of a crisis are more disastrous
than the crisis itself. So it proved during 1705 to the holders of Bank
stock. The losses to commerce during the war, the shock to credit at
the end of 1704 began to exert an influence in checking business, and the
profits available for distribution were smaller than usual, so that the
dividend in March had to be again reduced, on this occasion to SJ per
cent. Prior to the declaration of the dividend the stock was fairly
steady, though on the whole it tended to fall. The price was 120 J on
January 3rd and it was below 120 by the 8th. From the 8th to the
22nd it stood at 119-119|. Between January 24th and February 2nd,
quotations receded from 118 to 114^. Then there came an improve-
ment and 116 was reached by the end of the month. The dividend of
3J per cent., as against 4J per cent, in the corresponding half-year,
proved disappointing, and the first price after the books were opened
was only 108 on March 21st. On the 23rd 104^ was recorded, 102 on
the 26th and 98 on the 28th, a fall of 10 in a week. During April and
May there was a slight recovery, the fluctuations being between 102 and
100. In June the stock again lost ground. It was 100 J on the 1st and
fell steadily to 92 on the 29th. The market steadied itself in July
(although in this month most other companies touched the lowest point
in the year), the price being 95 on the 4th and 95^ on the 30th, after
having fallen to 93J on the 20th. During August there was evidently
an expectation that the September dividend would be some improvement
on that declared in the previous March, and 97 J was quoted on the 22nd,
this being followed by 97 on the 31st and 96i on September 5th. The
Bank however could do no more than repeat the 3|^ per cent, dividend
making 7 per cent, for the year, as against 8f paid in the previous year.
Some compensation may have been found in the return of £^. \0s. per
cent, capital, making with £5 repaid in March 8^ per cent, for 1705 (as
against £1 in 1704) ; still the payment of a dividend of one per cent,
less than the interest received by the Bank from the government suggested
the inference that a loss had been made in the banking business; or that,
if profits had been made that could not be divided, the institution must
be sorely pressed for funds. Such ideas are reflected in the course of the
market for the stock during the next four months. Early in September
the price had been 96^ ; after the dividend had been paid, it was from
88 to 89, showing a fall of nearly 5, allowing for the deduction of the
dividend. These quotations were unchanged throughout October and
until the middle of November. By November 16th the stock had
improved to 90, only to fall back to 88^ at the end of the month, and

222 The BmiTc of E^igland [div. x. § 1

to 87 on December Btli (this being the lowest price of the year) recovering
to 89J on the 28th.

During the year 1706 similar causes continued to affect adversely the
business of the Bank. It is true that until the middle of March
quotations moved but little — between 88^ on January 18th and 91 on
February 26th, the latter price being the highest of the year." Once
more the half-yearly dividend was less than expected, namely 3 J per
cent, with a repayment of 7 per cent, on account of the engrafted stock.
During the months of April, May, June and July the market was
sluggish, the extreme variations in the four months having been only
between 83 and 85. Towards the end of August in previous years there
had been animated transactions in view of the dividend announcement.
For three half-years speculators had been disappointed and in 1 706 the
quotation only rose f to 85f. After the dividend of 3 J per cent., or
7 per cent, for the year, with a repayment of 4 J per cent, (being 11 J
per cent, for the year on the latter account) was paid, there was another
serious fall in the stock. When the books were re-opened it stood at
77i on September 25th, rising to 78J early in October, and falling back
to 78 on the 4th, then to 77 on the 16th and finally to 76^ on the 18th,
about which it remained till the end of the month. This was the lov/est
point of the year — the lowest too since 1697, and represents a fall of 14f
from the highest price in 1706 and of no less than 72 from that of nine
years before. This may possibly have been the occasion referred to by
the author of the Anatomy of Exchange Alley when he asks, " who were
the men, who in the late hurry of an expected invasion, sunk the price
of stock 14 or 15 per cent. ? Who were the men that made a run on the
Bank of England, and pusht at them with some particular pique too, if
possible, to have run them down, and brought 'em to a stop of payment?
...Will they tell us that running upon the Bank and lowering the stocks
was no treason.^. . .Is not a wilful running down the publick credit, at a time
when the nation is threatened with an invasion from abroad and rebellion
at home ? Is not this adding to the terror of the people ^P" During this
period, and for the next few years, rumours of invasions and Jacobite
plots formed the usual basis for a " bear-raid"*"* on stocks. It is probable
that the passage quoted above refers rather to the French expedition of
1708 ; but, whatever was the cause, the depression of Bank stock shows
that the effect was serious. The Union was being debated in Scotland,
and it soon appeared that there was a strong party against the measure.
Riots were frequent towards the end of October 1706, and it may have
been thought in London that the Jacobite faction in Scotland would
take advantage of this state of feeling, and that there might be an

1 Reprinted in Francis^ Chronicles of the Stock Exchange, p. 872.

Div. X. § 1] The Depression of 1706 223

insurrection, assisted by French troops. The reason that an invasion, in
the interests of the exiled family, was dreaded was not only on account of
the evils of a civil war, but because it was believed that it was the policy
of the Pretender to repudiate the existing National Debt\ Therefore
any such rumour would have a most serious influence on the stock-
market.

Whatever was the cause of the low price of Bank stock in October and
November 1706, it is evident that the situation was considered most
alarming, and it is noteworthy that the stock of the Million bank suftered
similarly : whereas the prices of the India companies'* shares had been
lowest in January and were much higher at the end of the year. The
severity of the crisis, experienced by the market in Bank stock, may be
judged by the fact that authentic news in December was sufficiently
depressing, yet from the 10th the price was 84 or over, marking a recovery
of £S from the lowest point in October. It is true that a public
thanksgiving for the victories of the army was held in December, but
the situation in Scotland was for a short time very serious. There were
numerous riots, and orders were issued, it was said, to troops in England
and Ireland to be ready to sail, and these if necessary were to be supple-
mented by drafts from Flanders^.

In January 1707, as it became known that the Union would be
passed without alteration or delay by the English Parliament, prices
of securities were first steady, at a low level, and then began to
improve. Bank stock stood early in the month at 84 and, after
small variations, closed at the same price. By the 7th of February
the price relapsed to 81|, partly as a result of a meeting of the court on
the 5th at which it had been decided to advance the government
d^l ,200,000 at 5 per cent, on the extension of the charter for twelve
years, partly by renewed fears of an invasion^. A rival proposal was
submitted by a gi*oup of private bankers to circulate J'l ,500,000
Exchequer Bills at 5 per cent.; and, the Bank having offered to
take 4J per cent, on the same conditions, its offer was accepted on
February 14th^ On the following Monday, the 17th, the stock rose

1 The Fears and Sentiments of all True Britons with respect to National Credit,
1710, p. 8 ; The Spectator, No. 3. This is the import of the sponge in the hand of
the Pretender in the " Vision of National Credit" ; An Essay towards the History of the
last Ministry and Parliament: containing seasonable Refections on Favourites, Ministers
of State and Puhlick Credit, 1710, in Somers' Tracts (1748), ii. p. 266 ; A Letter to
a New Member of the Honourable House of Commons; touching the Rise of all the
Embezzlements of the Kingdoius Treasure, 1710, in Harleian Miscellany (1746), vi.
p. 288.

2 Luttrell, Brief Relation of State Affairs, vi. pp. 95, 108, 110, 119; Burnet,
History, \. p. 291.

3 Luttrell, Brief Relation of State Affairs, vi. p. 136. * Ibid., vi. p. 139.

224 The Bank of England [div. x. § 1 .

to 92, after being 82f the previous week. The March dividend was™
£%, Ws. \\\d. per cent., with a return of 3<y. OJdf. per cent, on account
of the repayment of capital, making a distribution of 3f per cent. This
was the last transaction on account of the engrafted stock, and, when
the 3^. OJd had been distributed in July, this additional stock, which
had been retained in the books at its original amount (although subject
to repayment by instalments), was finally cancelled, thus restoring the
capital to the original sum of .£'1,200,000. The market for the stock
was favourable in March, April and June. By the end of April the
price had returned to par — the first time this quotation was recorded
since June 6th, 1705. It remained over 100 till the middle of May,
but during the following two months there was a slight reaction and
quotations were between 97 and 98 J.

By July the calls required from the proprietors to circulate the
Exchequer Bills, authorized in February, had been received in part on
the new capital created for that purpose in the previous March. The
amount to be added to the stock was decided by the following method.
The capital had been .£2,201,171. \^s. from 1697 up to the repayment
of the last of the engrafted stock in March 1707. This operation
reduced the capital to the original amount of ^1,200,000, but at
the same time the court made a call of 50 per cent, on the whole
amount, both original and engrafted stock, which would have realized
d^l ,100,585. 15,9., had not the Bank returned the proprietors
^99,414. 5,9., leaving the balance of the call ^1,001,171. 10^. This
added to the original capital of .^g'l ,200,000 made the total new capital
.£'2,201,171. 10^.

As the operation was slightly intricate, the following tabular state-
ment shows how it was effected :

The Capital re-arrangement of 1707.

£ s. d.

Capital from 1697 to 1707 2,201,17110 0

Deduct engrafted stock, cancelled March 1707 ... 1,001,171 10 0

Total capital after cancellation of engrafted stock £1,200,000 0 0

£ s. d.
Call of 50% on £2,201,171. IO5. =1,100,585 15 0
Less amount divided out to pro-
prietors 99,414 5 0

Nett amount added to capital by

the call £1,001,17110 0 1,001,17110 0

Total capital after March 1707 £2,201,171 10 0

The effect of the whole operation was that, although the capital
was unchanged, over a million of it, which was now repaid, and which
at March 1707 had only £2,^25 of cash against it (owing to the

Div. X. § 1] The Capital increased 1707 225

previous repayments of engrafted stock), was now once more represented
by subscriptions from proprietors on which calls were being made.

This substitution of a real, for a nominal capital was one element
in the strengthening of the credit of the Bank during 1707. The
circulation of Exchequer Bills, by its agency, added to its claims on
the State; and, as arising out of this, it had been entrusted with the
remittance of the "Equivalent money" to Edinburgh^ The Union
between England and Scotland had now begun to work with less friction,
and some merchants were of opinion that the French might sue for
peace. These considerations had a favourable effect on the stock-
markets. Towards the end of April, as already mentioned. Bank stock
had reached par and by the end of June it was 97^. On the news that
on July 18th the Old East India company would submit the outstanding
disputes with the English company to the arbitration of Godolphin,
there was a general rise, not only in the securities of these undertakings,
but also in that of the Bank, the latter reaching 108 J on July 28th.
In August the stock rose from 109J to lllj. The September dividend
was favourable, being 4 per cent., thus showing an increase of \ per cent.
on that paid in the last four half-years ending September 1706, and
making £1. Ws. \\\d. per cent, for 1707. By October 3rd the price of
the stock had advanced to 119, the highest in the year and a rise from
the previous October of no less than 43| or over 56 per cent. In the
remaining months of the year the price fell slightly, touching 113f
on November 19th, after which it recovered to 117 at the end of
December. The causes of this depression are to be found in the loss
of Sir Cloudesley ShoveFs fleet at the end of October, the proclama-
tion for a general fast on the 17th of November and the resolution of
the House of Commons to impose a land-tax of 4^. in the £^.

It is unfortunate that the Daily Courant (from which most of the
previous prices have been taken) ceased to print quotations for the year
1708, and there are few to be found outside the issues of the Flying
Post. Transactions are recorded from the beginning of March to the
end of July, but there are none during the very interesting period when
there was considerable alarm in P'ebruary as to a possible invasion by
the French^. Whether there was any material fall in prices cannot be
known (unless quotations for these months should be discovered). The

1 Part of this remittance was made in bills, which occasioned discontent in Scot-
landj vide infra, Division x., Section 3.

2 Luttrell, Brief Relation of State Affairs, vi. pp. 228, 235, 236.

3 Ibid., VI. p. 269; An Account of the Late Scots Invasion as it was opened by my
Lord Haversham, in the House of Lords on 2oth February, 170|. In A History of
Agriculture and Prices in England, by J. E. T. Rogers, vii. p. 711; two quotations
(ll7i, 117i) are given in February 1708.

S. C. HI.

226 The Bank of England [div. x. § 1

first price recorded is on March 8th, 1708, which was practically th^"
same as that at the end of December, being 117J. Although it was
believed on March 12th that the French fleet had not sailed in a
northerly direction, news was received, by the middle of the month,
that it was off the east coast of Scotland, and troops were hurriedly sent
to the norths By March 24th Bank stock was at 111 J, and Luttrell
states, on March 16th, that it had been announced in the House of
Commons that the prices of stocks, which had fallen considerably, had
now improved^. There had been material losses in the securities of the
East India companies, the Old Company's stock having fallen 6 in a
fortnight and that of the New Company 13|^ in the same time. This
may have been the occasion mentioned by the writer of the Anatomy
of Exchange Alley previously quoted^. Parliament took notice of the
depression of the stock-exchange and resolved on March 20th that
"whosoever designedly endeavoured to destroy or lessen the public
credit, especially at a time when the kingdom was threatened with an
invasion, was guilty of a high crime and misdemeanour, and an enemy
to her Majesty and the Kingdom'*." By the end of the month, news
had been received from Scotland that the hostile fleet had sailed home-
wards, and that it was judged safe for the troops brought from Holland
to return there ^ By the middle of April, Bank stock had risen to
128, an improvement of over 16 J in less than three weeks. This was
attributable partly to the certainty of the suppression of the insurrection
in Scotland, partly to a slight increase in the dividend, which was 4| per
cent., as against £^. Ws. \\\d. per cent, in the corresponding half-year.
Quotations were very steady in May and June and on till the end of
July. It might be expected that the September dividend of 8^ per cent.,
making 12| per cent, for the year, would have led to an advance in the
price. If this were so, any gain made must have been lost before
the end of the year, since the first transaction recorded in 1709, on
January 28th, was at 118, or a fall of 9| from the previous July. The
causes for the reaction were twofold. The battle of Oudenarde had
been fought in July 1708, and the arrival of news of the victory had
had a favourable influence on the stock-market. Afterwards the war,
though favouring the Allies on the whole, had not advanced so rapidly
as many had expected. Then the government was applying to the
Bank for a fresh loan of large amount. Previous experience may have
suggested that the issue would be raised by creating new stock at par ;
and, in view of such a possibility, the price was apparently too high.

^ Luttrell, Brief Relation of State Affairs, vi. pp. 279-83.
^ Ihid., VI. p. 279. 3 Vide supra, p. 222.

* Journals of the House of Commons, xv. p. 621.
^ Luttrell, Brief Relation of State Affairs ^ vi. p. 283,

Div. X. § 1] The Capital doubled 1709 227

Early in the year 1709 the proprietors debated very closely the proposed
loan and increase of capital, and it eventually became necessary to
adjourn the meeting^ On February 5th, 1709, the company decided
to ofFer to lend the government dg'400,000 free of interest, or in other
words by adding this to the original capital (which had been borrowed
at 8 per cent.) the government would owe the Bank ^1,600,000, on
which the interest would remain =£'96,000 a year, so that the effect of
the change was to reduce the rate of interest from 8 per cent, to 6 per
cent. The Bank was to be given till August 11th, 1711, to pay this
amount of .^400,000, and a discount of 6 per cent, was to be allowed
on all or any part of the loan paid to the Exchequer before that date.
The whole amount was paid by September 3rd, 1709, and the Bank
received a total discount of ^£^46,512. 16^. 8^.^ It was also proposed
that the Bank should circulate .^2,500,000 of new Exchequer Bills. It
was agreed that the capital necessary should be provided by the doubling
of the existing stock, i.e. by issuing .£2,201,171. 10,y. at 115, making
the total capital £'4,402,348, and realizing at the proposed premium
£^2,531,347. 4^. Qd. on the new subscription. This proposal was dis-
cussed in the House of Commons on February 10th, and it appears that
pressure was put on the Bank to circulate an additional half-million of
Exchequer Bills ^. The proprietors met, and decided to adhere to their
original proposals ^ The Act 7 Anne cap. 7 accepted the offer of the
Bank, and postponed the date of redemption until one year's notice had
been given after August 1st, 1732. On Tuesday, February 22nd, the
subscription lists for the new capital were opened at the office of the
Bank in Mercers' Hall at 9 o'clock, and the whole amount was taken up
by 1 o'clock, " indeed such was the crowd of people that brought their
money to that fund, that near one million more could have been sub-
scribed that day I" The price of the stock at the time of the subscription
was about 117, and this included a right to the dividend to be declared,
which turned out to be 4|^ per cent., or an increase of ^ per cent, on the
corresponding half-year of 1708. After the transfer books were re-
opened, the quotation touched 115i, the lowest recorded price of the
year, on April 1st. Information of the progress of peace negotiations
soon affected the stock-market, and several securities reached the highest
prices of the year in the fortnight between May 24th and June 7th,
Bank stock rising to 135 or a gain of 19^ in two months. Although
the negotiations were broken off, the distribution of a bonus of 7^- per

1 Luttrell, Brief Relation of State Affairs, vi. p. 403.

2 Earlier Years of the Funded Debt, ut supra, p. 68.

2 Journals of the House of Commons, xvi. pp. 100, 101.
* Luttrell, Brief Relation of State Affairs, vi. p. 40G.

^ Ibid., VI. p. 410 ; Chandler, Proceedings of the House of Commons, iv. p. 117, note.

15-2

228 The Bank of England [div. x. § 1

cent, in July was favourably interpreted, especially as this was followed
by a further dividend of 4 per cent, in September, being 16 per cent, for
the year. The first quotations, after the payment of the September
dividend, seem low, namely 120, 119J on October 21st; but, in com-
paring these with those current in June, it is to be remembered that the
latter included prospects of a bonus and dividend together amounting
to 11^ per cent., which had since been paid. So that, in spite of the
news of the victory of Malplaquet which had been received in London
in September, the price of the stock ex dividend was slightly lower.
During November quotations remained about 120 to 121, but in
December there was a reaction to 115|^, occasioned chiefly by the
Sacheverell prosecution, partly by another issue of stock in order to
support the circulation of a further sum of <^400,000 in Exchequer
Bills. The total amount of stock subscribed was ,^656,204. 1^. 9<i.,
which, added to the existing capital of ^^4,402,343, made a total of
^£^5,058,547. \s. ^d. This issue was made by offering each of the pro-
prietors the option of increasing his holding by 15 per cent., payable as
to £B on December 29th, £5 on the 25th of January, £B on 25th of
February, subject to a discount of 9 per cent., if paid on or before
December 29th in cash or Exchequer Bills\ Offers of 2i premium were
made for "liberties on the call of 15 per cent.," this being equivalent
to the difference between the issue-price of the new, and the market
price of the old stock 2.

In January 1710 the price of Bank stock opened lower than it had
been in the previous year. On the 4th it was 112 and on the 6th lllf .
On the 9th a rise began which continued till February 17th when 129|
was quoted, that being the highest point of the year. This advance was
due to the report that Louis XIV. had signed the preliminaries of
peace^. The stock remained between 126|^ and 128 till March 3rd.
By the 14th it had relapsed to 123^, but recovered to 127f on the
27th. The deduction of the March dividend, this time of 4 per cent,
on the increased capital, accounts for the quotation about 123 to 123|
from April 14th to May 3rd. On May 5th the price fell to 121f , but
advanced to 124 on the 24th, and stood near that figure till June 9th.
Afterwards a steady fall set in, which with one or two recoveries con-
tinued to November 1st. By the end of June the quotation was 118f ,

1 Luttrell, Brief Relation of State Affairs, vi. p. 522.

2 The Post-Boy, December 19, 1709, i.e. at this rate the premium payable oi
the allotment of £100 new stock would be £15, the price of the existing stocj
being 116|.

3 Luttrell, Brief Relation of State Affairs, vi. pp. 546, 547. This rise in pric
was arrested by the Sacheverell Riots early in March^ during which the offices
the Bank were threatened by the mob.

Div. X. § 1] The Depression of 1710 229

during the first week of July it improved a little to between 11 9| and
119^. On the 11th, Anne had an attack of gout, and it soon became
known that the French plenipotentiaries had been dismissed, while
Jacobite medals were being freely distributed in England and Scotland ^
In view of these disquieting circumstances, Bank stock fell to 113^ on
July 14th, and to 112J at the end of the month. In August the political
situation at home occasioned uneasiness; and, upon the dismissal of
Godolphin on August 8th, the quotation was 108^^^ closing at 107^ at
the end of the months During the first fortnight in September, the
stock advanced to between 113 and 114^ on the publication of favour-
able war-news from Spain. This half-year the dividend was 3J per
cent., making 7^ for the year. In October came the turmoil of the
elections. The dismissal of the Whig ministry caused apprehensions
that the Tories would be enabled to favour the Jacobites, again there
were rumours of an invasion, and there was another run on the Bank.
The stock had been 111 ex dividend at the end of September, and it
had fallen to 105 on October 13th, on the necessity of the issue of
sealed bills at 6 per cent, interest^. By November 1st it had further
fallen to 95f , not only the lowest quotation in 1710 but the lowest since
1707. During the remainder of the year there was some recovery, and
105:^ is recorded on December 1st, but for most of the time the stock
was only a little over par.

The interest on Exchequer Bills had fallen into arrear, and in 1710
it was agreed that such arrears, as well as certain other Bills for the
quarterly allowance (issued at 4^ per cent, in 1709), should be added to
the million and a half of bills which the Bank had agreed to circulate,
making in all ^1,775,027. 17*. 10^(7., and that the bills should be
cancelled, by adding this sum to the permanent debt of the State, due
to the Bank, at 6 per cent, interest. The debt, owing to the Bank, thus
became ^3,375,027. 17*. lOd.^ To enable this operation to be carried
out a fresh issue of capital was made pro rata, this time of 10 per cent.
The amount received (some proprietors not paying in full) came to
d^501,448. 12*. lid; which, added to the existing capital, made
^^5,559,995. 14*. 8d, at which it remained till after 17^

In the first days of 1711 there was a further fall in Bank stock
on the receipt of intelligence of the reverses at Brihuega and Villa

1 Luttrell, Brief Relation of State Affairs, vi. pp. 604-8; A Detection of the Court
and State of England, by Roger Coke, 1719, m. p. 412.

2 A History of the Reign of Queen Anne, by J. H. Burton, iii. p. 65 ; Sojne
Reasons offered by the late Ministry, 1715, p. 55.

3 The author of An Essay towards the History of the last Ministry (Somers Tracts,
II. p. 269) gives the fall at this time as from 123^ to 107.

* Luttrell, Brief Relation of State Affairs, vi. p. 640.
5 Earlier Years of the Funded Debt, ut supra, pp. 69, 70.

230 The Bank of England [div. x. § 1

Viciosa. On January 3rd tlie price was lOlJ, but it had recovered to
103 on the 12th. After being about 103 till near the end of February,
it rose to 104 on the 26th and to 106 on March 16th. After deducting
the dividend of 3 J per cent., the stock was at 102^ on March 26th.
From April 11th to May 4th, the fluctuations were between 102 and
lOOJ, the latter being the lowest price of the year. The market then
improved slightly until 106f was recorded on June 11th, and it then fell
back again to 100 J on August 30th. Considering that a crisis had just
been experienced, the steadiness of the market is worthy of note, for
during eight months the extreme variations did not exceed 6J.

There were two favourable influences in September. One was the
passing of the act, incorporating the holders of certain debts as the
South Sea company, which was followed by the signature of a charter^
By this means certain pressing charges, as well as arrears of interest,
were funded, and it was considered at the time that this operation
exercised an important influence towards restoring credit. The second
indication of the coming of better times was the signing of eight
preliminary articles of peace on September 28th 2. The effect of
these events was a rise in Bank stock which was quoted at ri4f eoe
dividend on October 5th. The prospects of peace and the arrangement
of the debt were evidently welcomed by investors, for the publication of
the dismissal of Marlborough, on December 31st, failed to aff'ect the
prices of stocks. Bank stock for instance, which had fallen a little in
November, remained about 109 during December, and maintained this
price till the middle of the following January. There was a slight
relapse on the 21st to 108^ ; but, by the end of the month, the quota-
tion had recovered to 110^. In February 1712 the market was steady,
and prices tended to rise. By the end of the month the stock stood at
112^, about which price it remained till the end of March ^ or, allowing
for the deduction of the dividend, until the 4th of April. This dividend
was 4 per cent, and was therefore an advance of ^ per cent, on that paid
in each of the three previous half-years. That the court thought it
wise to make an increased distribution was favourably received, and the
stock rose to 111 on April 11th, and this price was maintained till
May 15th when there was a fresh rise to 115J. Except for a small
reaction in June, quotations were from 112 to 116 until the middle
of October — allowing for the fact that the September dividend of 4 per
cent, was deducted from the price on the 19th. Early in November the

^ Vide infra, Division x., Section 5.

2 The History of England during the Reign of Queen Anne, by Earl Stanhope,
1889, II. p. 228.

3 The Flying Post gives a quotation of 125 for March 6, 1712. This is no
doubt a misprint as the other papers record 112^ for the same day.

Div. X. § 1] Favourable Influences 1711-13 231

quotation was again about 115, rising to 116 at the end of the month.
December brought intelligence of the probability of the peace negotia-
tions being concluded, and Bank stock rose from 116 J on December 2nd
to 123 J on the 30th.

The condition of the Bank during the year 1713 is of no great
interest. The Peace of Utrecht was actually concluded in March, but
(as shown by the price of the stock) the effect of this had been dis-
counted in the previous December. By the Act 12 Anne cap. 11 the
Bank was authorized to circulate ^^1,200,000 Exchequer Bills, and to
enlarge its capital for this purpose, if necessary. The state of business
only justified the repetition of the same dividend, paid the previous year,
namely 8 per cent. Although peace had been concluded, the outlook
was uncertain, owing to the ill-health of Queen Anne and the doubts
that existed as to the succession. This alarming possibility, as well as
the large debt incurred during the war, induced a feeling of nervousness,
which prevented the benefit of the cessation of the war from effecting an
immediate improvement in credit.

These facts and expectations are reflected in the price of Bank stock.
It was quoted on January 2nd, 1713, at 122J, but had fallen to 119^ on
the 9th. During the remainder of the month the fluctuations were
between these two quotations. The market was stronger in February,
and by March 6th 125 is recorded. After a slight reaction, the same
price was repeated early in April, reaching 127 on the 8th. On the
17th, after the revelations made in the report of the Commissioners of
Public Accounts (which had been presented the previous day) showing
the large losses sustained by the Treasury in various ways^, the price
fell to 123|-123i. Until the end of May, there were no more than
fractional changes. On June 5th the stock was at 124^^, rising to 127
towards the end of the month. On the news that Anne was unable to
attend the public thanksgiving on the declaration of peace, which was
held at St PauFs on July 7th, there was only a very small decline, and
on the 31st the quotation was again 127. In August and the earlier
part of September there was a continuous rise until 130 J was recorded
on September 10th, the highest price of the year. In October the stock,
now ex dividend, was between 124^ and 123, and there was no change
in November. During December the quotation advanced a little, 125|
being recorded at the end of the month.

The month of January 1714 is memorable through an organized
attempt to produce a fall in stocks by the circulation of a report that
Queen Anne had died suddenly. Rumours to influence prices had been

1 The Report of the Commissioners for Taking, Examining and Stating the Publick
Accounts of the Kingdom with the Examinations and Depositions relating thereunto,

nif.

^32 The Bank of England [div. x. § 1

known long before, and what differentiates this one is the effectiveness of
the stage-management. One day towards the end of January a well-
dressed man, having all the appearance of a person of importance, rode
furiously down the Queen's Road, shouting that the Queen was dead. It
was known that she had been ill, and the news was accepted without
suspicion \ Business was suspended, and preparations were made for
a general mourning. What made the news so alarming was its unex-
pectedness. For some time past there had been intrigues as to the
succession, and as yet neither party was prepared. Therefore a time of
political confusion was to be expected, and the gravest national dangers
were anticipated. Persons, who had capital, wished to have a part of
their resources immediately available, and withdrawals from the Bank
began. These in a short time developed into a run, which attained
almost to the dimensions of a panic. East India stock had been 126 in
December, South Sea stock 94 J, and on January 29th the former was
118J: and the latter 85f . On the same day Bank stock was quoted at
120 J, a fall of nearly 5 in a month. The relapse continued (although
the Queen wrote to the Lord Mayor on February 1st announcing her
recovery 2) until April 2nd, when the quotation was 116f , the lowest
price of the year^ By the end of the month the stock had risen to
120|-121, and by the beginning of July to 123. For some days
afterwards the price was between 122 and 123. Then came the last
illness of Anne, who was seized with an apoplectic fit early on the
morning of the 30th. On the following day it was reported that she
was dead, and stocks rose three per cent. This was quoted as being
" infamous^," but the real reason of the rise was the appointment of the
Duke of Shrewsbury as Lord Treasurer, which implied that the plots of
the Jacobites would be checked. When the official news of the Queen's
death was announced on August 1st, the rise in Bank stock continued.
It was quoted at 130 on August 6th, and rose to 134 on September 10th.
Allowing for the deduction of the dividend, this price was maintained
till the end of the first fortnight in October. It might at first sight
appear one of the vagaries of finance that a false report of the death of
Anne should cause a short panic, whereas the event itself was accompanied
by a rise in stocks. The true explanation has already been indicated.
The report of January found the supporters of the Protestant succession
unprepared, whereas in July and August they were ready. The peaceful
proclamation of George I. accounts for the steadiness of the market at

1 Chronicles and Characters oftha Stock Exchange, by John Francis^ 1849, p. 47.

2 Malion, History of England, i. p. 59.

2 Anderson (Annals of Commerce, in. p. 278) gives the fall as from 126 to 116,
as against one from 125f to 116| in the prices mentioned in the newspapers.
* Swift, Works (Faulkner's edition, 1767), xiv. p. 361.

Div. X. § 1] Death of Anne and the Rehellion 1714-15 233

the advanced quotations. Reports of the activity of the Jacobites,
towards the end of October and early in November, depressed prices,
Bank stock falling to 126f on November 6th, after which day it rose
slowly and closed at 129 in December.

The victory of the Whigs at the elections, early in 1715, was favour-
ably received by the stock-market, as making for settled government,
and by February 11th Bank stock had risen to 134^, the highest price
of the year. The March dividend was this time 3f per cent, or a reduc-
tion of \ per cent, on those paid in each of the six previous half-years.
The lower dividend did not materially affect quotations, for the price
remained over 130 till the end of May. The report of the Secret
Committee on June 9th caused a very slight fall, which was recovered bv
the 24th. For the first three weeks in July, the price fluctuated from
132 to 131f , but on the 27th there was a fall to 126^, occasioned by
anticipations of a rebellion which had been forecasted in the King's
speech on the 20th. During the next fortnight prices continued low,
from 126 to 127J, but rose by the 15th of August to 133. For the
following month, i.e. from August 15th to September 13th the fluctua-
tions were from 131 to 133. Then came a rapid fall on the news that
the Earl of Mar had raised the Pretender's standard at Kirkmichael on
September 6th. On September 21st Bank stock had been 129, it was
124 on the 22nd and 123 on the 23rd ex dividend, recovering to 126^ on
the 28th, and being quoted at 125J on the 30th. On October 9th the
price had risen to 127^, afterwards it fell rapidly, giving way to 115 on
November 11th. This was the lowest quotation of the year, and it con-
stitutes an interesting comment on the financial state of the country that
this price is very little lower than that of the crisis of 1714, thereby
showing that a serious shock to credit was considered as menacing as
a civil war.

The news of the defeat of the Jacobite army at Preston (which took
place on November 11th) led to an immediate rise in the price of stocks.
Bank stock had been 117 J on November 14th and it touched 119 the
same day, rising further to 120 on the 15th, by the 20th it was 124 J, an
improvement of 7 in six days. For the next three weeks it fluctuated
from 123 to 124 J ; and, on favourable news of the prospects of the
suppression of the Rebellion, there was a sustained rise from the middle
of December to the end of the month, when the price was 127^ on
the 30th.

In the first week of January 1716 the quotation was as high as 128 ;
then, when it became known that the Pretender had landed in Scotland,
there was a reaction to 126^; and, owing to the disappointment occa-
sioned by the apparent supineness of the army in the North, the price
fell to 123| on the 26th. Early in February it became known that the

234 The Bank of England [div. x. §

Jacobite army had retreated from Perth ; and, on the 6th, the quotation
had risen to 128^. After falling, the stock was again at 128 on the
12th ; and, upon intelligence being received, that the Pretender had
re-embarked on the 4th (which was announced in the House of Commons
on the 16th), the price continued to rise, reaching 130 J at the end
of the month. After a temporary fall to 127^, the quotation recovered
again, and remained steady at about 130, until the closing of the books
on March 16th. The stock, ex dividend of 4 per cent., was quoted at
128-1281 on March 22nd, a rise of over 2, and it advanced till 134
was recorded on June 1st. The Rebellion was now over, and the quota-
tion of Bank stock was almost the same as that ruling a year before.
On May 31st, 1715, it was 132, and on June 1st, 1716, 134. The lowest
price in 1715 showed a fall of close on 20, all of which had been
recovered by the end of June 1716.

After the Rebellion, the outlook was more favourable for the general
business of the country than it had been since 1703. The succession
was settled, there was peace at home and abroad, and a ministry was in
office that was expected to be more favourable to the monied interest
than that in power during the closing years of the reign of Anne.
Owing to these circumstances, a great rise began in Bank stock which
continued, with a few interruptions, until 1718. The price was 134J in
July 1716 — a rise of 11| since the beginning of the year — and by the
end of the month it was 137. At the end of September 140 was
recorded, and 148 on October 13th, the highest quotation of the year.
In the next week there was a sharp fall, owing to the friction between
George I. and Lord Townsend, the stock reacting to 141 on the 24th
and to 135 on November 30th, a total fall of ^^13 in six weeks^ During
December there was an improvement and the price closed for the year
1716 at 137i.

In January 1717 Bank stock fluctuated between 137| and 139 J,
closing at the latter price. The information of a Jacobite plot, in
which the Swedish minister was implicated, gave some uneasiness to
business men; and, during the end of February, Bank stock was from
135| to 138. When Parliament opened on February 20th, the King's
speech had made allusion to the necessity for " reducing by degrees the
insupportable weight of the national debt."*' There had been many
schemes for lessening the indebtedness of the nation, some of them of
a confiscatory nature, and the proposal was so badly received that a

^ In Mahon, History of England (i. p. 252)^ it is suggested that contemporary
writers exaggerated the nervousness in the City at the fall of Townsend, and it is
said that the total fall in stocks was not more than one per cent. But from the
beginning of the strained relations of King and Minister the fall was 11 per cent,
in Bank stock.

Div. X. § 1] Improved Prospects 1716-17 235

loan of =^600,000 at 4 per cent, had not been subscribed in full. On
March 5th a resolution was moved " effectually to make good all parlia-
mentary engagements.'' There was some discussion as to the attitude of
the Bank; and, while several members recognized the services it had
rendered, Aislabie, then Secretary of the Navy, charged the directors
with being ready to support the late ministry \ All the chief public
stocks, such as those of the Bank of England, the East India, South Sea,
and Million bank companies were seriously affected by the dread of the
forecasted changes. As holding loans to the government, they had to
face the possibility of a reduction in the interest they received ; and, in
the case of the Bank, there was the possibility that its present capital
might be swamped by the addition to it of a large number of debts ; for,
it was by the subscription of the annuities, debentures &c. into the stock
of a trading company, that Walpole proposed to effect the reduction of
the interest charge payable by the State. The discussion of this plan of
finance belongs rather to the history of the South Sea company^, which
put it into practice in a manner that led to unfortunate results ; but, for
the understanding of the situation in March 1717, it may be mentioned
at the present stage, that to make it desirable for the holders of loans
to convert them into stock of a company and for the government to
authorize such conversion, it was necessary that the company should
receive less interest for the loans it would take over than had been paid
previously to the individual bondholders, and that the deficiency in
income, thereby likely to be experienced by owners of government stocks,
should be made good by the profits earned by the company in its trading
capacity. But this aspect of the question leaves out of sight the interests
of the shareholders in the company on which stock was to be engrafted.
If the undertaking were in want of additional capital (which could be
raised by borrowing on the security of the increased government debt),
the increased profits from an enlarged capital might maintain the old
rate of dividend on the new capital. If, on the other hand, the present
resources were ample, the trading profits would in the future be dis-
tributed over a larger share-capital, with the consequence that the
original stockholders would suffer. In the latter case, a certain body of
persons, engaged in a business undertaking, would be taxed to lessen the
general charge on the nation at large.

The stockholders in the Bank considered that their present capital
was ample, and therefore the effect of Walpole's scheme would have been
to diminish the value of the existing stock. This attitude of mind was
reflected by the course of quotations. The price of Bank stock had been
139 at the end of January and it had fallen as low as 131 J on March 8th,

1 Chandler, History of the House of Commons , vi. p. 112.

2 Vide infra, Division x., Section 6.

236 The Bank of England [div. x. § 1

on the same day all other stbcks (except that of the African company,
which was unaffected by the scheme) reached the lowest points of the
year. East India stock, for instance, in the same period fell 12, and
South Sea stock 9J. In view of these facts, the fall of Walpole in April
caused an immediate revival of confidence, and, by the end of May, the
loss in the price of Bank stock had been recovered. By July 5th the
quotation stood at 148, thus repeating that current in the previous
October. The rise, which had been interrupted from November 1716 to
March 1717, was now resumed, 155 J being recorded on July 17th. In
August, September, October and on till the middle of December, the
price was lower owing to the war which had broken out between Spain
and Germany, for it was feared that Britain would be involved in the
struggle, owing to the obligations imposed by existing treaties. On
December 13th Bank stock had been 148f ; but, on more favourable
foreign news and the attention paid by Parliament to the scarcity of
silver coins (which was a great impediment to business at the time), the
stock, which had been 152 on December 20th, rose to 157 J on the 30th,
that being the highest price of the year and a rise of 26 since the
previous March. For the first quarter in 1718 the price continued to
improve, until 161f was recorded on March 8th. This was the highest
quotation both of 1718 and also in the series of years since 1710-11.
The passage in the King's message, delivered to the House of Commons
on March 17th, which, after alluding to the negotiations " of the utmost
concern " then in progress, asked for an increase in the Navy, showed
that the country was gradually drifting towards war with Spain, and an
immediate fall in stocks was one effect of the message. Bank stock had
been 161f on the 8th and by the 21st it had fallen to 152. Allowing
for the deduction of a 4 per cent, half-yearly dividend, the price remained
steady till the beginning of June ; and, on the sailing of Byng's fleet for
the Mediterranean, there was a further small relapse. In July the stock
rose a little, and on August 15th 152f was recorded. News of the
victory, gained by Admiral Byng against the Spanish fleet at Passaro,
off the coast of Sicily, on August 11th, was received with mixed feelings.
While a British success was gratifying, the collision with Spain had made
war inevitable ; and, towards the end of August, Bank stock was falling,
and it was quoted at 148 J on September 3rd, a loss of 4 J within three
weeks. The seizure of the goods of English merchants in Spain caused
great disquietude, and by October 9th, Bank stock had fallen to 140,
the lowest price of the year. The formal declaration of war with Spain
was made on December 17th ; but, in view of the events of the summer,
this had been fully discounted, and the price of the stock (which had
been 145|^ on December 5th) rose to 151 J on the 22nd and to 154^ on
the 29th, so that although the country was at war, the price at the end

Div. X. § 1] A Time of Prosperity 1718-19 237

of the year was only slightly lower than it had been in the previous
January.

In January and February 1719, considering that the country was at
war, the fluctuations in Bank stock were not large. With the exception
of one week from January 9th to 16th, when the quotation was as low
as 152f , the price varied between 155 and 158, the latter figure (which
was the highest of the year) being recorded on February 13th. On the
27th of February the stock was 157. In March the Pretender was
received publicly in Spain, and it began to be feared that a Spanish fleet,
which had been collected for some unknown purpose, was designed to
convoy transports for an invasion of the British Isles. On March 10th,
George I. announced in the House of Lords that these anticipations were
well founded, and between March 4th and March 13th Bank stock fell
no less than 14 — from 156 J on the former, to 142^ on the latter day.
As showing the excitement of the time business was done between 145
and 142^ on the 25th. After the first shock of the news, it was
recognized that the danger had been exaggerated, and the author of
the Anatomy of Exchange Alley, writing in the following April, was in
doubt "whether it was ever worth our being so much alarmed, as
we have been in Exchange Alley \" This projected invasion depended
for its success on taking Britain by surprise, and it was already fore-
doomed to miscarry once the country was prepared. The storm that
dispersed the fleet completed the failure and relieved the anxiety in the
City. Up to April 10th Bank stock gradually rose to 146J ; then, on
the news that two ships of the expedition had succeeded in landing
troops at Kintail in Ross-shire on the 16th, there was a fresh reaction to
143f on the 29th. The futile nature of this disturbance was soon
recognized, and in May the stock rose from 145 to 147J. This improve-
ment continued till July 10th, when 154 was recorded, a gain of 11^^ in
less than four months. There was a slight reaction in the middle of the
month, and the quotation on the 29th was 152^. Early in August
there was a sharp fall, but this was apparent rather than real and was
occasioned by the deduction of a bonus of 10 per cent, paid in July out
of capital. This distribution did not affect either the nominal amount
of stock or the sum credited as paid up. The former remained at
^5,559,995. 14*. 8^. and the latter at £100 nominal. The capital thus
returned was restored in part in 1722 and the remainder in 1744 2. In
July the stock had sold between 153f and 152J, and on August 7th it
was quoted, ex bonus, at 142^ to 143— the difference being almost
exactly accounted for by the bonus being deducted from the earlier price.
During the rest of the month of August quotations advanced, 149 being

1 Francis^ Chronicles of the Stock E.vchange, p. 382.

2 Earlier Years of the Funded Debt, ut supra, p. 71.

238 The Bank of England [div.

recorded on the 28th and again on September 9th. A week later there
was a fall to 147, and this price was repeated (allowing for the fact that
the stock was ex dividend after September 23rd) until October 23rd.
On the 30th the price touched 140^, the lowest point of the year. The
attitude of the stock-markets in the second half of November and the
month of December is of great interest. It soon became known to a
favoured few that the South Sea company had a scheme in view that
would give great advantages to the proprietors ; and those who were
acquainted with the actual proposals, which were discussed in December
and had probably been matured earlier, were engaged in a speculative
purchase of stock. The original form of the scheme was designed to
amalgamate the Bank of England and the South Sea company, and
gradually orders were placed on the market for the purchase of the stock
of both companies. The result was a steady rise in the last eight weeks
of 1719. Bank stock advanced from 140^ to 149f or a rise of 9J,
and South Sea stock during the same period from 116f to 127 J — a
rise of 10 J.

In the fatal year 1720 Bank stock rose till January 29th, when
153 was recorded, a gain of 2f since the beginning of the year and
during the same time South Sea stock was almost stationary. The
suggestion had been made that the benefit of the proposed conversion
should be divided between the two companies, and this being rejected
by the court of the South Sea company, the process described "as setting
the nation up to auction*" began ^ The tale of the contest for the
monopoly of the conversion belongs rather to the history of the
South Sea company, and the proceedings of the Bank may be seen more
clearly in relation to the rival proposals of the younger company. On
February 1st, the matter was to be decided by the House of Commons,
and in the forenoon the stocks of the two undertakings fluctuated
violently. Bank stock, which had been 153 on January 29th, varied on
the eventful Tuesday from 156 to 147J, South Sea stock from 129
to 137 J. The difference was that the latter closed strong and the
former weak. Evidently the decision of the House of Commons had
been forecasted with a fair degree of accuracy. As showing that the
excitement was confined to these two stocks, it may be mentioned that,
while they each fluctuated more than 8 points on the same day, the
quotations of East India stock only varied by J. There was a debate
in the evening, and Walpole defended the Bank, but Aislabie, now
Chancellor of the Exchequer, who owned South Sea stock (for which he
found it difficult to account a year later), was able to convince a House,
which had reasons for wishing to be convinced, that the offer of the

1 Timberland, Proceedings of the House of Lords j iii. p. 176.

Div. X. § 1] The Speculation of 1720 239

South Sea company was more favourable, and it was resolved that this
should be accepted^. The consequence was an immediate rise in the
stock of the South Sea company, and a fall in that of the Bank. The
latter declined to 145^ on February 3rd, but rose to 149-152 on
the 5th. Until the closing of the books on March 2nd, the price
varied between 147^ and 154 J, closing at 150, so that the fluctuations
of the month from February 5th to March 3rd were not as great as
those of February 1st. After the books were re-opened, the stock was
quoted at 15^ on March 18th, then came the excitement from the
21st to the 23rd, when the stock-market was greatly disturbed— South
Sea stock fluctuating between 270 and 380 on the 23rd, while Bank
stock was from 160 to 175 on the 21st. This great advance could only
be maintained temporarily, for the shares in the Bank had no great
speculative possibilities; and, as the tide of gambling began to be
directed towards South Sea stock, that of the Bank was sold and the
price fell from 175 on March 21st to 139 on April 22nd.

From the end of April the South Sea company began to lend money
on the security of its stock, and the Bank followed this dangerous
example. The effect of such facilities for speculation was soon apparent.
Between April 22nd and May 21st Bank stock rose from 139 to 210, an
advance of 71, and South Sea stock from 343 to 460, an advance of no
less than 117 in a month. During the next five weeks the directors of
the Bank began to see the danger of the situation, and they appear to
have exerted their influence to check the excessive speculation in Bank
stock. It is true that on Friday, June 24th, the stocks both of the
Bank and of the South Sea company reached the highest prices of the
year (that of the latter indeed was much higher than it had been before
the inflation), but during the five weeks Bank stock had risen from
205-210 on May 22nd to 265 on June 24th, a total gain of 60;
whereas, in the same period. South Sea stock had been inflated from
between 420 and 460 to 1050, or an advance of 600 in the five weeks,
representing a profit of six times the par value of the stock in this short
space of time^.

While the price of South Sea stock was crumbling away at the end
of August and during the month of September that of Bank stock was
comparatively steady. From the highest quotation of the year — 265 on
June 24th — it had fallen to 210 (at which it had stood previously at
the end of May) by September 9th. Between the 9th and 26th this
price was recorded six times, and it is instructive to compare the wild
fluctuations of South Sea stock during the same eighteen days. On the

^ Chandler, Proceedings of the House of Commons, vi. 213.

2 The variations in the price of the stock are shown in the diagram of the
maximum daily fluctuations from May to September at the end of this volume.

240 The Bank of England [div. x. §

9th it varied between 575 ai:id 650, on the 14th from 555 to 590, on the
19th from 440 to 380, on the 21st from 350 to 395, on the 26th from
360 to 300. Thus although Bank stock had been sold within these
eighteen days at prices showing a difference of 65^ the same price occurs
at the beginning and the end of the period, whereas in the same time
South Sea stock had fallen no less than 350 or over 50 per cent.

Until October 7th Bank stock remained about 200, and a little con-
sideration must have shown that the price was much too high. The
dividend for the year had been 7 J per cent., and thus the yield was about
3f per cent. Further there were no prospects pointing to future great
developments. On the contrary, other bankers were failing daily. At
any moment the Bank of England might find itself seriously involved,
and the fact that it survived the panic is an enduring tribute to the
prudence and tact of the directors of the institution, which, amidst the
ruin of this fatal year, was to the sorely stricken mercantile community
" like the Capitol to old Rome^"' In addition to the losses through
failures of private bankers there was also the prospect that the Bank,
after having been slighted by the ministry of 1720, would be called upon
to make some sacrifices to aid in restoring credit. Taking these facts
and contingencies into account, it will be apparent that the price of the
stock at the end of September could not be maintained.

One reason for the strength of Bank stock was the influence of
what was known as " the Bank-contract."' This was drawn up early in
September and provided that the Bank should take South Sea stock at
400, in payment of a sum of <^3,775,025. 17^. \0d. of redeemable debt
held by the Bank 2. Now as long as South Sea stock was over 400 (as it
was till September 7th) it would be apparently to the advantage of the
Bank to complete the bargain. On till the 22nd, with the exception of
one or two transactions. South Sea stock remained at 400 or over it.
Then came the suspension of payment by the bankers of the company —
the Sword Blade banking partnership^ — on the 24th — and South Sea
stock, which had touched 400 on Friday 23rd, was as low as 300 on
Monday the 26th. Quite apart from the effect of the failure of the
Sword Blade bank in reducing the price of South Sea stock, it affected
the Bank of England in forcing it to collect its resources in view of the
extra demands now made upon it, and therefore the directors refused to
complete the agreement. Aislabie charged the Bank with breach of

1 Considerations on the Present State of the Nation, as to Publick Credit, Stocks,
the Landed and Trading Interests, London^ 1720, p. 17-

^ Journals of the House of Commons, xix, pp. 319, 320 ; Francis, History of the
Bank of England, i. 135 ; Anderson, Annals of Commerce, iii. p. 351 ; Proceedings
of the House of Lords, in. p. 181.

3 Vide infra. Division xn.. Section 3 c.

Div. X. § 1] The Panic of September 1720 241

faiths and there appears to be little doubt that an agreement was made
which only required to be formally completed. It is difficult to say
what information the governor and directors had before them, when
they withdrew from the understanding arrived at. From the point of
view of commercial morality, a mere fall in South Sea stock below the
400, mentioned in the proposals, would have been no excuse for the
Bank's withdrawal. The failure of the Sword Blade company meant
that, if the Bank of England had attempted to complete the agreement,
it would also have been involved in the collapse, with most serious
effects on the national credit which was already severely shaken. Besides,
whether the directors were aware of it or not, the mala fides was in
reality on the side of the South Sea company. As shown by the
" Report of the Committee of Secrecy^" in the following year, huge dis-
bursements had been made for illegal or dishonourable purposes, and
therefore the actual financial condition of the undertaking was much
worse than it appeared. Possibly some inkling of these facts may have
reached the court of the Bank, so that, on grounds of fair dealing and
expediency alike, the directors were justified in refusing to complete the
agreement, and they thereby saved the country from a much greater
extension of the panic.

The reflection of the refusal of the Bank to support the South Sea
company on the prices of the stocks of both was very marked. That of
the latter had been 400 on September 23rd, and by the 29th it was only
200. It is true there was a recovery to 290 on October 3rd, but this
was followed by a fresh fall to 200 on October 12th. Bank stock
fluctuated between 200 and 180 during the first week of October, and
on the 12th it fell from 170 to 140, touching 130 on the 14th, thus
recording a loss of no less than 70 in a fortnight. This was the lowest
price of the year, and it shows the resistance of the credit of the Bank
to the shock of the panic that the lowest point is no more than 9 below
a quotation recorded in the previous April before the South Sea inflation
had commenced. During the remainder of the year, the stock on the
whole improved. There was a sustained rise up to November 12th,
when 152 was recorded, an advance of 22 in less than a month, and

* " I was thoroughly satisfied that this agreement of the Bank was a legal and
firm bargain, and I can't yet imagine with what face of justice or equity they could
ever break through it..." Proceedings of the House of Lords, iii. p. 181. He further
stated " if what I have heard since be true and what they say has been publickly
avowed that this bargain was never intended to be kept, then I say it was not only
a useful secret to those that were in it but the most compleat stratagem of tlie
whole YQ?iT"—Mr Aislabies Second Speech on his Defence in the House of Lords, on
Thursday, July 20, 1721, pp. 18, 19.

2 The several Reports of the Committee of Secrecy, to the Honourable Home of
Commons, relating to the South-Sea Directors, S^c, London, 1721, pp. 11-23.
s. c. III. 1^

242 The Bank of England [div. x. § 1

a price very closely approaching the average of the previous Januai^
and February. Throughout the remainder of November the stock was
between 150 and 140. In December it fell as low as 132 on the 14th,
recovering however to 147-148 on the 30th ; this compares with 150 J
on January 1st, 1720 ; so that, after a year of exceptional strain that
closed in the break up of credit following a severe panic, the difference
in the price of Bank stock was no more than 3.

To complete the account of the Bank of England to the end of the
year 1720, it only remains to notice the effect on its capitalization of
the relief given the South Sea company in 1722. By the Act 8 George I.
c. 21 the latter company was authorized to sell, and the Bank to buy
og'4,000,000 of South Sea stock at 105. The Bank thus increased its
loan to the government by ^£^4,000,000, and it paid for such increase
.^4,200,000— the difference of ^200,000 representing the premium. To
raise the necessary capital, the court decided to issue .^3,400,000
stock at 118, which realized d£^4,012,000\ Therefore adding the stock
issued in 1722 to that already in existence — namely =£^3,400,000 to
^£'5,559,995. 14^. 8d— the total became <£^8,959,995. 14.9. M. : and the
debt due by the State at the same period was c£9,375,027. 17.?. lOd, the
interest on which, together with the charge for management, amounted
to J'490,649. \ls. Sd. annually. The government debt was soon in-
creased, but the total stock remained unchanged till 1742.

^ A portion of the premium of this issue was devoted to repaying to the capital
account part of the bonus drawn from it in 1719^ vide Earlier Years of the Funded
Debt, p. 71.

Div. X. § 1] Capital 1694-1722 243

Summary of Capital, Dividends and Prices of the Stock, 1694-1722.

Capital.

8. d.

1694. Loan to the State, of which 60% was paid by the sub-
scribers in 1694, 20% in 1696-7, and 20 7„ provided
from the profits ° 1,200,000 0 0

1697. Subscription taken in tallies and bank-notes (engrafted

stock) 1,001,171 10 0

Total stock 1697 2,201,171 10 0

From 1698 to 1707 the engrafted stock was repaid, and,
on the completion of such repayment, the stock was
cancelled, — deduct 1,001,171 10 0

Total stock 1707, after deduction of amount of

engrafted stock 1,200,000 0 0

1707-8. A call of 60% on the capital as
between 1698 and 1707 was made,
i.e. 50% of £2,201,171. 10*.= £1,100,585 15 0
The Bank at the same time divided

out to the proprietors 99,414 5 0

Leaving the net increase of stock ...£1,001,17110 0

Total (being the same as from 1698 to 1707) ...

1708. The stock was doubled— £2,201,171. 10*. being sub-

scribed at 115

Total stock 1708

1709. New stock was created to the extent of 15°/„ of

£4,402,343, of which there was actually paid up ...

Total stock 1709

1710. New stock was created to the extent of 10% of

£5,058,547, of which there was actually paid up ...

Total stock 1710 5,559,995 14 8

1722. In order to purchase £4,000,000 South Sea stock,
£3,400,000 Bank stock was issued and subscribed

atll8 3,400,000 0 0

Total stock 1722 8,959,995 14 8

16—2

1,001,171 10

2,201,171 10

4,402,343 0

656,204 1

5,058,547 1

501,448 12

244

Prices of the Stock and

Prices.

Year

Date of highest
price

Highest and lowest
prices

Date of lowest |
price

1694
1695

Dec. 21
Dec. 11—25

16 prem.— par
40 prem. — 14 prem.

Sept. 21
Jan. 2

1696
1697

1698
1699

Jan. 8
Sept. 15

Dec. 14—28
Sept. 27

48 prem.— 7 disc.
98— |62ii

103—86
119—1011

Dec. 9—23
Feb. 3

Jan. 12
Jan. 25

1700

March 13-20

148^-124^

Dec. 24

1701
1702

.?Jan. 1 to April 2
Dec. 9

123— j 973
U03i
129— 113J

March 6 (Luttrell)
April 9 (Houghton)
Jan. 14 22

1703

Sept. 1—15

1381—126

Jan. 15—20

1704

Feb. 28

133^-115

Oct. 30

1705

Jan. 3

120^-87

Dec. 5

1706

Feb. 26

91— 76i

Oct. 18 to Nov. 1

1707

Oct. 3

119-811

Feb. 7

1708

April 12

128—111^

March 24

1709

May 24

135—115^

April 1

1710

Feb. 17

129^— 95|

Nov. 1

1711

Oct. 5

114|— 100|

May 4, Aug. 30

1712

Dec. 30

123^—108

April 2 4

1713

Sept. 10

130J— 119i

Jan. 9

1714

Sept. 10

134—1161

April 2

1715

Feb. 11

134^—115

Nov. 11

1716

Oct. 14

148-1281

March 25

1717

Dec. 30

157^—131^

March 4

1718

March 8

1611—140

Oct. 9

1719

Feb. 13

158— 140$

Oct. 1, 6

1720

June 23, 24

265—130

Oct. 14

^ Bank-notes. 2 Cash.

3 For reasons, explained in the text, Houghton's figures are subject to doubt,
therefore the quotation from Luttrell is added.

Dividends, 1694-1720.

Distributions made on Bank Stock.

246

Dividend

Total

Capital

Total

Year

from profits,

dividend

returned

capital

distribu-

half-yearly

from profits

half-yearly

returned

tion °/,

£ *. d.

£ s. d.

£ 8. d.

1695

6 0 0

4 0 0

10 0 0

1696

nil

1697

3 10 0
20 0 01

4 0 0

27 10 0

27i

1698

6 3 2^

6 3 2\

0 16 9|...

0 16 9|

1699

4 10 0

5 0 0

9 10 0

1700

5 0 Oi

0 4 llf
0 9 11^...

5 0 Of

10 0 1

0 14 11

lOf

1701

4 10 0

9 0 0

1702

4 15 0

5 0 0

4 15 0

9 10 0

2 10 0 ...

7 10 0

1703

4 15 0

2 15 0
2 10 0

4 15 0

9 10 0

4 5 0 ...

9 10 0

1704

4 10 0

3 0 0

4 5 0

8 15 0

4 0 0...

7 0 0

15|

1705

3 10 0

5 0 0

3 10 0

7 0 0

3 10 0 ...

8 10 0

15i

1706

3 10 0

7 0 0

3 10 0

7 0 0

4 5 0 ...

11 5 0

1707

3 11 11^

0 3 0^...

0 3 Oi

4 0 0

7 11 iH

1708

4 5 0

8 5 0

12 10 0

1709

4 10 0
7 10 0

4 0 0

16 0 0

1710

4 0 0

3 10 0

7 10 0

1711

3 10 0

7 0 0

1712

4 0 0

8 0 0

1713

4 0 0

8 0 0

1714

4 0 0

8 0 0

1715

3 15 0

4 0 0

7 15 0

1716

4 0 0

8 0 0

1717

4 0 0

8 0 0

1718

4 0 0

8 0 0

1719

4 0 0

3 10 0

7 10 0

10 0 02

10 0 0

17^

1720

3 10 0

4 0 0

7 10 0

1 This 20 per cent, was utilized in lieu of the payment in cash by the proprietors
of the last call, or, in other words, the last call was paid by a bonus out ot the
reserved profits. ^ j ci. i

2 This distribution, described as a bonus, was made from capital, and afterwards

SECTION II. THE LAND BANKS.

The Bank of Credit on Land Rents (founded by Hugh
Chamberlain, 1695).

The Land Bank, Established Anno Domini 1695 (founded
BY John Asgill and Nicholas Barbon) ; The National
Land Bank (founded by John Briscoe, 1695). Amalga-
mated 1696 UNDER THE TITLE OF ThE NATIONAL LaND

Bank of England.

Once the building up of a credit system on a joint-stock basis had
been begun, the differences of opinion, as to the nature of the foundation
on which the whole edifice should rest, which had shown themselves
prior to the incorporation of the Bank of England, were likely, in
favourable circumstances, to produce attempts to issue notes on some
security other than a metallic one. During the speculative activity from
1690 there was a change of sentiment as to the different investments
favoured from year to year. "Some years ago people were in warm
pursuit after plate-wrecks, and, when that failed, the humour had
recourse to stock-jobbing, and, notwithstanding the vast losses and
disappointments therein, the whole nation and the legislative power
thereof fell headlong from thence into lotteries and from that extremity
we fell into another excess of banking\'''' The latter development was
the opportunity of those promoters, who aimed at the founding of banks
issuing notes secured on land and not on bullion. The most prominent
leaders in this movement were Hugh Chamberlain, Nicholas Barbon,
John Asgill and John Briscoe. Chamberlain was the earliest in the
field, and his schemes were reproduced at a later date, after those of his
rivals had been dropped. Thus he becomes connected with the histories
of the Banks of England^ and of Scotland =* as a competitor of Paterson
when the former was being established and, at a later date, as advocating
a change in the Scottish currency, which would have affected the fortunes
of the latter.

When the banking system of Paterson was accepted by the govern-
ment and granted legislative sanction, Chamberlain decided to prosecute

^ Some Considerations on the late Act of the Parliament of Scotland for Constituting
an Indian Company, London, 1695, p. 4 (Advocates' Library Pamphlets).
2 Vide supra, p. 204. 3 yi^Q infra, Section 3.

Div. X. § 2] BanTc of Credit on Land Rents 1695 247

his own scheme, without any recognition from the State. Accordingly,
when he found that the undertakings started by Barbon and Briscoe
were receiving support, he brought forward his plan for a Bank of Credit
on Land Rents. In October 1695 he published proposals offering those
who would join him a treble option, which he described "as equivalent
to a new discovered mine/' First, the owner of landed property might
mortgage it to the office of land credit for 150 years, receiving for each
£\60 rent per annum, so assigned, ^8,000 in the notes of the bank,
paying for the accommodation only \ per cent, interest annually and
repaying the principal at the rate of 1 per cent, a year for 100 years. In
the second place, he might borrow the same sum and (what was virtually
an identical proposal in another form), by paying IJ per cent, per
annum, become free from all liability to return the principal. Thirdly
he might sell his land outright at 80 years' purchase, receiving the
purchase money in land credit notes \ The secret of the financing of the
scheme depended on the payment being made in the obligations of the
office, these would have only cost the sum paid for printing, and the
small rate of interest was calculated to leave a substantial margin of
profit after paying office expenses. In addition, it was intended that
the bills should be employed in trade, and the gains resulting were to be
added to the income of the bank 2. Chamberlain contemplated taking
mortgages and making loans on rents up to ^50,000. The advances on
this sum would have come to .^4,000,000, and even the small interest of
J per cent, would have produced a gross income of <£'10,000. This was
subject to the charges of management; but, on the other hand, there
were the profits from trading on the credit of the notes to be added.
Necessarily, account should have been taken of the inevitable depreciation
of the notes and that, since these must have been accepted by the bank
that had issued them, the imaginary profit would melt away. Chamber-
lain himself was not blind to the hazardous nature of the operation he
proposed, since he stated that the reason the notes were to be issued
gradually was to prevent " a glut of credit," which was his euphemism

' London Gazette, October 25, 1695, reprinted in Rogers' First Nine Years of
the Bank of England, ut supra, pp. 53, 54.

[8223 e 7~i
Brit. Mus. ^-^ L P- 2. This phase of the

scheme was only developed fully in the proposals made later in Scotland {vide infra,
Section 3). The idea, at this time, seems to have been that the office issued the
notes as a loan, these were gradually returned to it, as interest paid by the borrower.
Such bills were to be employed in trade and gradually retired out of the profits
so made— Pajoers relating to a Bank of Credit on Land Security, 1693 [Brit. Mus.
1139 . h . 181. Elsewhere it is stated the notes were to be retired in equal numbers

r„ . ^, 8223.6.71
each year. The Constitution of the Office of Land Credit Brit. Mus. :^ J.

248 Bank of Credit on Land Rents 1695 \jyjv. x. §

for depreciation. Again he, is candid enough to admit that the whol
transaction was " no more than what is duly practised by gamesters who
engage their guineas to the box for 30 counters apiece which they then
value as 1^. each^" The essential fallacies of the scheme were glossed—
over by appealing to the suspicion of the " landed interest '' towards thefl
" monied men.""* All objections were treated as so many efforts of the
latter to prevent the former from borrowing, except on terms " which
were not interest but extortion,"*' while Chamberlain represented his
mission as " the freeing of our lands from the servitude and tyranny of a
devouring usury ^^

The internal organization of the office of land credit was somewhat
complex. The person, proposing to join it, " subscribed '" his property in
the sense of leasing it for a long period or mortgaging it to the bank.
He thereupon became a " Proprietor in the Office." There were also
" the Noble Visitors,'' who acted as trustees, in whom the subscribed
estates were vested, while there was a third rank or group, the
" Undertakers or Managers." Each of these classes chose equal numbers,
from its own body, to form " the Chamber of Control." Lastly, every
proprietor had one vote, and no more, in the choice of "Governors
of Trade" — the latter persons being those who were to manage the
commercial operations supported by the credit of the notes ^

On November 29th, 1695, Chamberlain announced that a total
rental of <i^50,000 had been subscribed ; and, at the request of those who
could not be included, this sum was doubled, and, later, it was announced
that loans were to be issued on a rental up to ^200,000 ^ Had this
amount been deposited, it would have been necessary to create notes to
the nominal value of more than ten millions ; and it was even proposed
to issue twice that amount to lend to the governments

A new phase of the scheme was announced on December 20th, 1695.
It was said that applications had been received from land-owners, who

^ The Several Articles or parts of the Proposals upon Land Credit Brit. Mus.

8223. e. 7"]

4 J-

[822 S e 7~1
' L p. 4 ; cf. Several

Assertions Proved in order to Create another species of Money than Gold and Silver
[by John Asgill]. Reprint Econ. Tracts, Baltimore, p. 30.

2 Constitution of the Office of Land Credit, ut supra, p. 8. Subscriptions were
first taken at Chamberlain's house in Essex St., afterwards at Mr William White's
chambers in the new building (No. 7), Lincoln's Inn.

* Constitution of the Office of Land Credit, ut supra, p. 3.

^ An Essay upon the Necessity of raising the value of twenty millions of pounds at
least, in either bills, bonds, tickets or tallies of credit, according to Dr Chamberlain s
method, in order to enable the King to carry on the war with France [Brit. Mus.
1390. e.l].

Div. X. § 2] Bank of Credit on Land Rents 1696 249

were ready to become members, provided their lands could be freed from
existing encumbrances. It is evident that, at this early stage of the
venture, mortgagors would not receive land credit notes, and therefore
Chamberlain proposed a method by which these encumbrances could be
met. He advertized that he was ready to receive subscriptions of cash
up to ^50,000, which were repayable in four annual instalments with a
bonus of 40 per cent.^ Or, according to a modification of this sub-
scription, the subscriber might elect to receive his principal back again
at the end of the four years ; and, instead of a bonus in cash, he could
obtain credit for an additional 20 per cent, in credit-notes, which would
be subscribed on his account into the projected trading stock 2.

In spite of Chamberlain's promises and the hopes that he raised, the
public was not sufficiently credulous to support his "office." Though
many believed that " land was the best bottom for publick banks^" the
schemes of Barbon and Briscoe, which were much less unsound than those
of Chamberlain, were sufficient to meet their needs. It has been
customary, when reference is made to the " land-bank '' of this period, to
associate it wholly with the name of Chamberlain, though his promotion
was in reality the extreme extravagance of the movement, not its natural
outcome. Indeed one might almost imagine that his office of land credit
was a parody of other promotions, but the venom with which he, as
" the first proposer of land-banks," attacks rival schemes shows that the
latter were gaining the support denied to him. His criticism of the
other propositions begins moderately enough in a Bank Dialogue (1695)
and becomes more acrimonious, till it ends in the tract entitled a Rod
for a FooVs Back'^.

The type of land bank promoted by Asgill and Barbon differs widely
from the credit office. The former was in fact a prototype of the
land-mortgage bank. Its constitution provided for the making of loans
on landed property up to three-quarters of the actual cash value. The
mechanism, by which it was proposed to record the loans, consisted of a
treble series of books, one of which contained the market value ("the
value of the auditor "), another three-quarters of that sum (" the value
of the register "), and the third the remaining quarter (" the equity of
redemption"). The amount lent must not exceed the value of the
register, paid to the borrower in the form of " bills of charge," divided
into denominations of ^1,000, £500, .^100, <^50, at an interest of

1 London Gazette j Dec. 20, 1695. This advertisement makes the instalments
equal ones.

2 Proposals of JDr Hugh Chamberlain for a Bank to secure current credit, 1696

r^ .^ -, 8223.6.71 ^
Brit. Mus. h P 3.

2 An Essay upon Projects [by Daniel Defoe], 1697, p. 67.

4 Brit. Mus. ^^^^-^-^ , 8227 . b . 7.
o

250 The Land Banks 1695 [div. x. § 2

3J per cent., if paid quarterly, or 4 per cent., if paid half-yearly. In
order to give currency to these notes, a public subscription was made,
and ^100,000 stock had been taken up by August 30th, 1695, on which
20 per cent, was to be paid on or before October 19th. It was provided
that the capital might be increased, until it amounted to ^£^500,000.
Great care was taken, in the planning out of the office, to prevent fraud
or careless management, while it was agreed that there should be
established a fund for insurance of " the bills of charge," first by setting
aside ^6^10,000 of the paid up capital and secondly by adding to that
sum \ per cent, out of each 3 J per cent, or 4 per cent, received as
interest on the loans. The members were entitled to two votes for =^^300
stock, three votes for ^£"500, and five votes for ^^1,000, but to no more.
The company was to be controlled by twenty-one trustees or managers,
each of whom must hold c£*l,000 stock. As a recompense for promoting
the enterprize, Asgill was to receive a bonus of ^£^3,000 stock and Barbon
d^2,000 stock, subject to the conditions that neither might alienate it
within seven years, nor purchase more stock than would make him the
owner of d£'5,000 nominal \

Briscoe's original scheme resembled that of Barbon, but there are
some important differences. In his office, which was called the National
Land Banh^ it was intended that estates should be purchased outright,
agricultural land at twenty years' purchase, ground rents at twenty-two
years' purchase and house property at seventeen years' purchase. Loans
were to be made thereon up to three-quarters of the value so arrived at,
and, as in the other land banks, paid to the borrower in notes. The rate
of interest was ^d. per diem or £^. Os. \0d. per annum. Each subscriber
of <^50 rent had one vote in the choice of managers. Besides the
operations on landed security, subscriptions were to be taken for
d6*l ,000,000 in money, payable as to 10 per cent, on September 29th,
1695, and by like instalments quarterly. In the terms of this proposal
.£^1,500 in cash was to rank equally with £%000 in land, so that from
the beginning, independently of other causes, the notes would have been
at a discount. Subscribers were to receive interest at the rate of 3 per
cent. " over and above the proportionate profits of the bank 2."

The lists were opened on June 11th, 1695, and the promoter took
care to recommend his scheme to owners of property. He declared that
the freehold estates of England constituted " the best fund or security,"
but that " the servile yoke of 6 per cent, had eaten up several estates."

1 The Settlement of the Land Bank established, anno Domini, 1695, Somers' Tracts,
XI. pp. 16-50.

^ The following proposals and accounts of a National Land Bank having been
printed at London [1695] ; Proposals for Raising money for the National Land Bank,

Aug. 7, 1695 [Brit. Mus. ????^^ 7i^l].

Biv. X. § 2] The National Land Bank 1695 251

While the Bank of England advertized that it would lend money at
5 per cent., it refused to accept titles of lands offered as security, " which
has turned the current of business another way and leads to the setting
up of banks in foreign countries, and the poor freeholders are left to shift
for themselves \" By August 3rd estates, valued at ^60,270. 10*. per
annum, had been subscribed 2, and thereafter a monthly abstract was
issued showing the progress of the undertaking I Towards the end of
the year the bank was believed to be likely to succeed. Luttrell, writing
under the date of August 15th, says that " both Dr Barbon's and Brisco's
land banks go on very successfully^,'' while another writer refers to the
latter as "standing so high in fame and making so great a noise in the
world and being so charming and attractive^."

Meanwhile difficulty was experienced in inducing those, who had
undertaken to subscribe cash, to pay the call due, and on September
17th it was announced that 10 per cent, discount was allowed on all
moneys, handed in to meet this liability before October 23rd ^ Then
in December there came a new development. It was well known that,
owing to the great cost of the war, there was a serious deficiency in the
Parliamentary supplies. Briscoe now came forward with a scheme, which
was presented to the House of Commons on December 2nd, under which
he undertook to provide a great part of this deficiency, on condition
that the National land bank received legislative sanction''. The office,
founded by Asgill and Barbon, was also in the field ; and, towards the
end of January or in the first days of February, both institutions
amalgamated^ The united undertaking submitted revised proposals,
and on March 5th, 1696, the House of Commons resolved that the loan
required " should be settled in the National land bank**.'' The act,
which gives effect to this resolution (7 and 8 Will, and Mary, c. 31), was
drafted on the same lines as that for founding the Bank of England, and
the form of both was followed in 1698 in the measure authorizing the

1 Briscoe's Advice to the Freeholder, pp. 3, 4; An Account of the National

r . r. , Fd .. Ti/r 816. m. 10"!
Land Bank Brit. Mus. „ .

2 Account of the Value of Estates subscribed towards the Fund for a National

r^ . ,. 712. m. 11
Land Bank 11 June to 3 August 1695 Brit. Mus. — .

r« . i»T 712.m.l"|

3 The Monthly Account of the Land Bank Brit. Mus. ' q ^q \ •

* Brief Relation, ut supra, in. p. 512.

5 Anglice Tutamen, ut supra, p. 9. ^ Post-Boy, Sept. 17, 1695.

712. m.l

To the Hon. the Knights Citizens and Burgesses assembled, S;c. I Brit. Mus.

8 Luttrell, Brief Relation, ut supra, iv. p. 13.

3 Journals of the House of Commons, xi. p. 495.

252 National Land Bank of England 1696 [div. x. § 2

subscription of capital for the New East India company. In all three
cases, the subscribers of a loan were to receive, in addition to the interest
paid in money, the privilege of incorporation with certain immunities.
The act of 1696 provides that, under certain conditions, the persons who
raised a loan of ^2,564,000 at 7 per cent, should be incorporated as the
Governor and Company of the National Land Banh of England, which
should be authorized to lend on land securities to its members to an
extent not exceeding the loan to the State. The conditions, on which
these privileges were to be vested in the company, were that one-half
of the loan must be subscribed before August 1st, 1696, and the whole
of it before January 1st, 1697. Persons, who took up this loan, must
pay on application one-quarter of the amount for which they tendered.
Registers must be kept of lands on which money was advanced on the
plan proposed by Asgill and Barbon. The company was to advance
,^500,000 by way of loan on real property at 3 J per cent., if the interest
was paid quarterly, or at 4 per cent., if paid half-yearly \

The subscription-books were to be opened at Exeter Exchange before
May 25th, 1696^ and it was recorded on June 11th that the loan had
been a failure ^ There is some doubt as to how little of the loan was
subscribed, one account giving a total of <£*40,000, but the Chancellor of
the Exchequer stated in Parliament that, at the closing of the lists, only
66^7,100 had been taken up, of which ^5,000 was on behalf of the King^

The absence of response to this loan produced great confusion in the
national finances for several years afterwards, and it had the effect
of discrediting all the land banks. The reasons this issue was not
subscribed are not far to seek. It came at the worst possible time, just
after the run on the Bank of England and while cash-payments were
suspended^ Coin was at a great premium, and no one was likely to
subscribe his money for 7 per cent, with dubious contingent advantages
when much more was to be obtained on equal, if not better, security.
Obviously, if 8 per cent, with trading privileges was a fair rate in 1694
and 1698, a considerably higher percentage would have been required in
1696. Moreover the failure of this loan is an instance of the peculiar
interaction of the Bank of England and the land banks. These had
been rivals from the beginning, the progress of the latter had something
to do with the suspension of the former, and that suspension again was
a powerful influence towards preventing the incorporation of the National
land bank.

1 Statutes, VII. pp. 181-45.

2 Luttrell, Brief Relation, ut supra, iv. p. 58. ^ /jj^.^ jy. p. 71.
* The Writings of William Paterson, by S. Bannister^ London, 1858, i. p. xliii. ;

The History and Proceedings of the House of Commons (^'Chandler's"), iii. p. 53.
According to the latter account the lists were not opened till June 5th.
^ Vide supra, pp. 208, 209.

SECTION III. THE BANK OF SCOTLAND (consti-
tuted BY Act of Parliament 1695).

The circumstances which led to the establishing of the Bank of
Scotland have been detailed by the founder of the institution, John
Holland. This merchant is said to have been an Englishman, but he was
acquainted with Scottish trade through his connection with the company
for manufacturing baizes which had obtained Parliamentary sanction in
1693^ Early in 1695 Holland had withdrawn almost altogether from
commercial pursuits, and " was thinking only of how he might spend the
remainder of his days in peace." A f;:iend, who was a Scotsman, when
visiting him, was full of a scheme for the foundation of a bank in
Scotland and urged Holland to give the matter his attention, assuring
him that an act of the Scottish Parliament could be obtained on his own
conditions. Holland eventually drew out a sketch of the constitution of
a bank, and in a few days the unknown intermediary had embodied it
in an overture of an act. At the same time the support of Scotsmen,
resident in England, had been obtained, so that a considerable amount of
capital had been secured before application was made to Parliaments
In the summer of 1695 all Scotland was enthusiastic over the prospects
of the Darien scheme, which had been passed by the Estates on June 26th.
Paterson intended this company to undertake banking operations, and he
was considerably chagrined to find that on July 17th another act had
been passed, not only establishing a banking company, but giving it
a monopoly for twenty-one years. In a letter, written in August, he
says, " I desire to see a copy of the bank act so surreptitiously gained.
It may be a great prejudice, but is never likely to be of any matter
of good to us, nor to those who have it^"

The following are the leading provisions of the act :
(a) Incorporation was effected under the title of the Governor and
Company of the Bank of Scotland, as one body corporate and politic with

1 Vide supra, p. 173.

2 The Ruine of the Bank of England and of all Publick Credit inevitable, by John
Holland, London, 1715.

3 The Writings of William Paterson, by S. Bannister, London, 1858, i. p. xxxvii.

254 The Bank of Scotland [div. x. §

the usual powers of perpetual succession and a common seal, of purchasing
and alienating lands, tenements and all other heritage, as likewise all
sums of money and other moveable goods and gear whatsoever: and
further to do and execute all other things which any other company
or body politic can or may lawfully do or execute, and that as amply and
fully as if the several matters and things were particularly set down
in this act^

(5) Capital and Subscription. The capital was fixed at ^£^1 ,200,000
Scots, being the same amount, hut in Scottish currency^ as that of the
Bank of England. In sterling currency the capital of the bank of
Scotland was .^'l 00,000. A subscription book was to be opened at
Edinburgh from November 1st, 1695, to January 1st, 1696, in which all
persons might subscribe, subject to the following conditions :

(i) The minimum subscription was <^1,000 Scots and the
maximum ,^^'20,000 Scots.

(ii) 10 per cent, of the subscription was to be paid on application,
(iii) Two-thirds of the total subscription was to belong always to
persons residing in Scotland 2.

(c) Constitution. The management was in the hands of a governor,
a deputy-governor and twenty-four directors, elected annually. The
qualification for votes in the election of governor and directors was to be
one vote for every d£*l,000 Scots of stock. Persons eligible for the office
of governor must hold at least ^£^8,000 Scots in their own right, those
eligible as deputy-governor £6fi00 Scots, and those eligible as directors
c£*3,000 Scots. The quorum consisted of any seven of the governor,
deputy-governor and directors. Vacancies, through death or lapse of
qualification, were to be filled by votes of the members*.

(d) Powers of the Court. Besides being responsible for the general
management the directors were empowered :

(i) To determine the date and amount of further calls in
addition to the 10 per cent, paid on application, under penalty of
forfeiture*.

(ii) To lend upon real or personal security "and to receive
annual rent for the same at 6 per cent, as shall be ordinary for the
time.''

(iii) The capital of the bank was to be employed in the trade of
lending and borrowing money upon interest and in no other^.

(e) Special Privileges :

(i) Transfers of shares might be made either by will or by
registry in the company's books " without necessity of confirmation or
further formality ^"

1 Act of Parliament for erecting a Bank of Scotland , p. 2. 2 jf)id,^ pp. 1^ 2. m

3 Ibid., p. 3. * Ibid., p. 4. ^ Ibid., p. 8. « Ibid., p. 6. ^

Div. X. § 3] Constitution and Privileges 1695 255

(ii) The joint-stock of the bank, continuing in money, was to
be free from all public burden to be imposed upon money for 21 years,
(iii) During 21 years no other "distinct company of bank'^
might be established in Scotland.

(iv) In cases of bankruptcy or forfeiture of the property of a
shareholder, provision is made "to expose by public roup such shares
and the profit thereon to any other person who shall bid the highest
price therefore. . .and the price arising from the said roup to be made forth-
coming by the said company to the creditors, heirs or others succeeding
to the right of the person so denounced or forfeited ^"

(v) Foreigners, who became shareholders, also became naturalized
Scotsmen.

(f) Security by and for the hank. "It is hereby declared that
suramar execution by horning shall proceed upon bills or tickets drawn
upon or granted by or to and in favour of this bank and the managers
and administrators thereof for the time, and protests thereon in the
same manner as is appointed to pass upon protests of foreign bills by the
20th act Pari. 1681 K. Ch. II. and sichlike that no suspension pass of
any charge (for sums lent by this bank or to the same) but upon discharge
or consignation of the sums charged for allenarly^."

{g) Payment of Dividends. It is also provided that no dividend
shall be made, except out of the profits on the paid up capital and with
consent of the adventurers in a general meeting^.

Of the ^400,000 Scots (or i^33,333. Qs. M. sterling), available for
persons residing in England, the whole amount was subscribed for in one
day, and the remainder of the authorized capital amounting to d^800,000
Scots (or .^66,666. \Ss. ^d. sterling) was taken up in Scotland by the
date specified in the act for the closing of the lists ^ It was indeed
alleged that "the country clamoured against the management for the
packt way they took to make up their subscriptions ^''"'

Just as in the manufacturing industries, Scotland was utterly
destitute of technical skill ; and, though two-thirds of the capital had
been subscribed by Scotsmen, none of them were competent to undertake
the control of the business to be established. Accordingly Holland, who
had been elected governor, agreed to reside for some time in Edinburgh
and to superintend the early operations. He relates that at first,
through ignorance of the methods of banking, his colleagues objected to
his recommendations, but that in the end they consented to be guided by

^ Act of Parliament for erecting a Bank of Scotland, p. 7.
2 lUd., pp. 6, 7. 3 lud., p. 6.

* A Historical Account of the Bank of Scotland, Edinburgh, 1728, p. 2.
^ A Premonitor Warning or Advice [hj J. Armour of Glasgow], Edinburgh, 1702,
p. 7.

256 The Bank of Scotland [div. x. § 3^

his experienced These facts account for the arrangement, which also
obtained in the Scots linen manufacture, that the deputy-governor and
half the directors should be Scotsmen residing in Scotland, and the
governor and the remaining twelve directors represented the shareholders
living in England 2.

It was not long before the bank began business. On the completion
of the subscriptions in January 1696, 10 per cent, of the total — this being
the amount specified in the act as payable on application — was collected
from the proprietors, amounting to ^^120,000 Scots or J*10,000 sterling^
Notes were issued for ^100, ,^50, ^20, £\0 and £B sterling ; and the
bank made loans on heritable and personal bonds and by the discount of
inland bills. It was in this way that it placed its notes in the hands of
the public. In order to facilitate inland exchange, branches at Aberdeen,
Dundee, Glasgow and Montrose had been opened by April 9th, 1696,
but it was found necessary to close the first and last named on Dec. 24th
of the same year. These were the main classes of business transacted*,
deposit-banking not having been begun at this time.

Once business was started, the bank had soon to meet a very dangerous
competitor in the Darien company, which began to issue notes during the
first year of the bank's existence ^ This constitutes one of the very many
instances of the invasion of the monopoly of an early company. The
Darien company circulated notes to a considerable value, which were forced
into circulation, partly by being used in making payments, and partly by
being issued to proprietors in the form of a loan on the security of their
stock in the company ^ The directors of the bank were considerably
perturbed by such competition ; but popular feeling, in favour of the
Darien company, was so strong, even amongst bank shareholders, that
Holland was afraid to risk making any attempt to restrain his rivals from
the issue of notes. The bank saw that, if a contest were begun " it
might suffer an affront in its infancy by a demand greater than its

1 The Ruine of the Bank of England, ut supra.

2 Historical Account of the Bank of Scotland, p. 2.

3 From the Records of the Bank.

* Historical Account of the Bank of Scotland, p. 3 ; The History of Banking in
Scotland, by A. W. Kerr, p. 23 ; The One Pound Note, by William Graham, 1886,
p. 3. The Glasgow branch was closed on January 3rd, 1697, and that at Dundee
on October 6th, 1698.

^ There is an impression of the plate from which these notes were printed in The
Darien Papers (Bannatyne Club), p. xxix., and a reproduction of some of them in A
History of William Paterson and the Darien Company, by J. S. Barbour, 1907, p. 32.

^ Historical Account of the Bank of Scotland, p. 4. The Darien company, while
invading the spirit of the act founding the bank, was protected by the letter, which
bound the legislature not to establish "any distinct company of bank." The
Darien company had decided to issue notes by June 18th, 1696 (Darien Papers,
ut supra, p. 9).

Div. X. § 3] Effect of Darien Co.'s Note Issue 1696 257

cash^;' Therefore its policy was to " lie by " for a little, and endeavour
to maintain its credit. This appears to have been seriously strained, for
it became necessary in September to ask for a payment by the proprietors
of 20 per cent. It would appear that the ^^20,000 realized was not
considered as an addition to the permanent paid up capital; but, as
happened in the case of a similar call in 1704, as a loan to the bank.
An official of the bank speaks of " some loss " having been incurred
at this time^; and it was popularly reported that, during the early years
of its existence, " common interest had not been made'.'' Not only was
the credit of the bank threatened, but business was almost suspended.
As time went on, the reckless nature of the banking operations of the
Darien company resulted in a serious check to its financial status, even
before the disastrous consequences of the first expedition to New
Caledonia were known*.

No sooner had this difficulty, " which was thought greater than any
the company could ever meet afterwards,'"* been surmounted than
"negotiations'" were recommenced. It shows how great were the
impediments to communication between important towns in Scotland,
owing in some degree to the rigidity of the interpretation of the
privileges of the Royal Burghs, that there were very few remittances to
be made from Edinburgh to the provinces, and hence " the money, that
was once lodged at any of those places by the cashiers issuing bills
payable at Edinburgh, could not be withdrawn thence by bills from
Edinburgh ^" It was considered also that the exchange trade, besides
being an encroachment on private merchants, was " very troublesome,
unsafe, and improper." For these reasons the Glasgow branch — the
only one now remaining of those opened in 1696 — was closed in 1698
and the bank " brought its money back by horse carriage to Edinburgh."
Another effort towards the extension of business appears to have been
made about 1699, when the issue of notes of 20^. sterling was proposed,
but it was not until 1704 that the scheme was carried out^

Scarcely had the competition of the Darien company ceased when the
bank was subject to a fresh trial, this time arising out of the mediaeval
legislation against usury. By an act, 1 Charles II. cap. 49, interest on loans
was fixed on certain conditions at 5 per cent. In 1696 or 1697 the bank
had lent £^00 at 4 per cent., subject to payment being made within

^ Historical Account q/ the Bank of Scotland j p. 4. ^

2 Ibid., p. 4.

^ A Premonitor Warning, ut supra, p. 7-

4 Historical Account of the Bank of Scotland, p. 4; vide supra, ii. pp. 218-21.

^ Historical Account of the Bank of Scotland, p. 5.

6 Extract from the records of the bank taken by Mr J. S. Barbour in History of

Banking in Scotland, by A. W. Kerr (1902), pp. 335, 336.

17
s. c. III. ^'

258 The Bank of Scotland [div. x. § 3

thirty days. If the loan remained outstanding for a longer term, the
rate was to be 6 per cent. This agreement led to an interesting action.
The debtor pleaded that he could not be held liable for more than the
legal rate of 5 per cent. — a contention, which if established, would have
had serious consequences for the bank. Counsel for the other side relied
partly on the powers, given by the act of 1695, of making by-laws,
partly " on the evident ease of 2 per cent, in case of punctual payment,
while the exacting six per cent, is but like a penalty or timely failing in
a bond and cannot be accounted usury."" On behalf of the debtor it was
replied that " private paction cannot derogate from public law " ; and
that, if the bank's contention were accepted, 7 per cent, or 8 per cent,
might on similar grounds have been inserted. The Lords divided on
this point as being new, and the plurality found that 6 per cent, was due,
"not as an annual rent but as damages liquidated between the parties^.""

From 1699 to 1706 the bank of Scotland narrowl}' escaped being
drawn down in the collapse of the Darien company. It is most in-
structive to compare the position of affairs in Scotland with the analogous
relation between the Bank of England and the South Sea company. The
latter, like the Darien company, had the support of the government ;
and, in providing financial assistance in 1720, the Bank of England
barely escaped failure. The under-current of hostility between the two
Scottish companies prevented the bank of Scotland from becoming
involved on behalf of the Darien company — ^yet the difficulties of the
larger undertaking brought the bank into very troubled waters.

The foundation of the Darien company was the culmination of
Scottish commercial policy, and the whole fate of the country's trade was
staked on the success of its colony. To raise the capital required for
this enterprize, as well as for the numerous recently established manu-
factures, wealth, that was ear-marked for the personal expenses of the
better classes, was utilized as capital. Therefore the nation, as a whole,
was in the position of a speculator, who cannot afford to wait for a
distant return, however great, but must have quick results to discharge his
liabilities as they mature. In other words what is sometimes called
" consumption capital " had been used as fixed capital, with the result
that the nation was denuded of money owing to the exports of bullion to
pay for ships, stores, and machinery for the new colonial and manu-
facturing enterprizes^. Had the Darien scheme begun to yield a profit

on its first voyage, the country would have experienced little more than

^ Dictionary of Legal Decisions, p. 16,419.

2 Cf. Giffen — ''to a certain extent, however, they [i.e. investments beyond the
savings of a community] can be made. Unawares, a portion of the means required
for consumption may be diverted to fixed investments." Stock Exchange Securities,
p. 21.

Div. X. § 3] Credit in Scotland 1695-9 259

a temporary pressure ; and, with high hopes of a colonial empire, credit,
while somewhat strained, might have remained good. As a matter
of fact the capital called up by the Darien company (which many of the
stockholders could not afford to pay) was, at the best, indefinitely locked
up and, at the worst, was a total loss. Add to this the amounts
invested in manufacturing undertakings, which were unproductive, and it
follows that more than the available capital resources of Scotland for new
enterprizes had been either lost or at least was temporarily unre-
munerative.

Soon the pinch began to be felt, there were many failures and wide-
spread distress. The general credit had sunk so low that " men of very
good fortunes could not procure money to answer their necessary
demands ^" Every one felt the cessation of industry and the want of
money. It is most significant that even shareholders of position in the
Newmills company were forced to obtain advances from the managers
on account of future dividends likely to accrue to them^ " Trade," was
described "as ruined; the national stock wasted; the people forsake the
country ; the rents of lands are unpaid ; houses in towns and farms in
the country are thrown upon the owners' hands; the creditor cannot
have the interest of his money to live on, and the debtor's person and
estate are exposed to the law^"" Under the prevailing mercantilist ideas
there was a general impression that the remedy was to be found in
an increase of the circulating medium. No device succeeded, for obvious
reasons, in adding to the quantity of metallic money in circulation, and
like causes prevented a material expansion in the issues of bank-notes.
But the very success of the system of a note-issue of the bank directed
popular attention to the subject of paper-money ; and, from 1699, there
were numerous proposals for the creation of inconvertible paper currencies
of various kinds. Such proposals, involving as they did, the issue of
paper-money either by the State, by municipalities or private pei-sons,
all tended towards the abrogation of the monopoly of the bank of
Scotland, and they were therefore considered prejudicial to its prosperity.
In the case of the Bank of England attempts of the same kind had been
made, but these were not so long sustained as the unsound money
campaign in Scotland, and it was a significant fact that the acceptance
of the project for a land bank in England by the House of Commons
had caused a fall of £%^ per cent, in Bank stock within a fortnight*.

1 The Occasion of Scotland's Decay in Trade [1705] (Advocates' Library Pamphlets).

2 The Records of a Scottish Cloth Manufactory at New Mills, Haddingtonshire, 1681-
1703, edited by W. R. Scott (Scottish Hist. Soc. 1905), pp. 245, 248, 291.

3 Money and Trade Considered: With a Proposal for supplying the Nation with
Money, by John Law, 1705, Chap. viii. (in Somers' Tracts, 1751, xvi. p. 383).

4 The First Nine Years of the Bank of England, by J. E. Thorold Rogers, Oxford,
1887, p. 50 ; vide supra, pp. 208, 209, 244.

17—2

260 The Bank of Scotland [div. x. § 3

The first Scottish scheme was brought before Parliament in 1699. It
was suggested that notes should be issued by the State to the extent of
d6*300,000 sterling in denominations ranging from <^100 sterling to
1^. sterling. These notes were to be divided amongst the burghs
proportionately to their contributions to the national taxes ; but, of the
total amount due each burgh on this basis, only |ths was payable in the
proposed paper-money. The remaining ^th, being notes of the nominal
value of ^60,000 sterling, was to be a national joint-stock for trade
at home and abroad ^ Burgesses were to receive such notes in satis-
faction of debts due them, and each burgh would be allowed to pay
one-tenth of its contribution to the public taxes in the same way. As
the notes were returned to the national exchequer they were to be
destroyed, so that in time the whole issue would be cancelled ^ This
proposal had the usual characteristics of schemes for an inconvertible
paper currency. It was to have a forced circulation, and it promised
redemption. There was latent in it the danger that the issue would not
be limited to the specified amount.

The time was now ripe for the appearance of Hugh Chamberlain,
who had schemes for the raising of a credit system on the security of
land^. It is stated that he had " with the project in England broke and
spent so great a part of his own money that he was necessitated to fly
out of the Kingdom '*.'" The best commentary on the somewhat cryptic
nature of his earlier proposals is to be found in the revised editions
submitted to the Scottish Parliament. The following may be taken as
a characteristic example of his methods as explained to the English
public : " the proposer lends the sum of <^8,000 on the security of ^150
per annum for 150 years at the yearly interest of only twenty -five
shillings for every ^100, to continue for 100 years and never return the
principal, or five shillings interest and return the principal by twenty
shillings a year for every d^lOO, or (which is to the like purpose) the
bank gives 80 years' purchase for a rent charge of ^100 for 100 years".""
The earliest scheme brought forward by Chamberlain in Scotland, in
1701-2, very closely resembles the third of the three methods outlined in

1 On the basis of this scheme it was proposed in 1701 to form a " Society anent
Export and Import" to the capital of which the New Mills company undertook to
subscribe £1,200 Scots in three equal instalments — Records of a Scottish Cloth Manu-
factory, ut supra, p. 287.

2 Parliamentary Papers, 1699 (General Register House Edinburgh) — Proposal
for advancing Trade.

' Vide supra, p. 208.

* MS. " Memoirs concerning the affairs of Scotland from Queen Anne's Acces-
sion to the Throne to the Commencement of the Union of the Two Kingdoms "
(Lib. Univ. St Andrews BN . 3 . 77), p. 59*.

^ Rogers, First Nine Years of the Bank of England, p. 53.

Div. X. § 3] Chamberlain's Land Credit 1701-2 261

his London advertisement of 1696. He points out the advantage a
country enjoys when money is abundant and goes on to argue "that
bills of credit, founded upon land and strengthened by the sanction of
the law and made in a form incapable of forgery, will be an excellent
medium of trade, equal in all respects to gold and in many respects
superior to it^" Trustees were to be appointed, who would receive
conveyances of non-encumbered estates which the proprietors were
prepared to pledge to the proposed " land credit bank." The trustees
would then lend the proprietor a sum equal to 100 times the present
annual value of the pledged estate, payable in the notes of the bank.
The land-owner became the tenant of the land bank and undertook to
repay the amount in the form of a rent, payable also in land bank notes
for 100 years at the expiration of which period the paper-money created
would be returned and destroyed. The proposed bank was not only to
create credit, but to act as a trading institution. The heritors and
proprietors, who pledged their lands, were to be incorporated. The
notes returned to the bank were not to be destroyed immediately but to
be allocated as follows : 30 per cent, would be utilized as capital for
trading operations as the capital subscribed by the individual proprietor
that had paid them in, 40 per cent, reverted to the proprietor, 10 per
cent, was to be devoted to relief of taxation and the remaining 20 per
cent, was retainable by Chamberlain as a payment for promotion. How
the ultimate cancellation of the obligations was to be effected does not
appear ^

A revised version of the scheme was published by Chamberlain's
Scottish partner, James Armour, in 1702. Loans were to be made
in notes of the land bank as before, but repayment would be distributed
over a period of only 29 years, the annual amount of which would be at
the rate of 4 per cent, on the sum advanced. This interest was payable,
as to three-quarters in notes of the land bank and the other quarter must
be lodged in cash. The latter receipts would be utilized as capital for a
trading venture, the benefits of which would accrue to the subscribers.
It was a characteristic of this scheme also, that the notes should be
cancelled at the end of the 29 years, but at that date only 87 per cent,
would have been returned to the office, so that it must have been
contemplated that the bank, in its trading capacity, would have made
sufficient profits to cancel the outstanding 13 per cent.=^ If we try to

1 Proposals of Dr Chamberlain [Advocates' Library Pamphlets, Brit. Mus.
1139. e. 15]; Papers relating to a Bank of Credit upon Land Security [Brit Mus.
1139. h. 18].

2 Ibid.

3 A Premonitor Warning or Advice, pp. 9, 10. In 1696 there had appeared a
tract entitled^ Proposal to supply the Defect of Money, which, from internal evidence,
may be attributed to Armour.

2i^S The Bank of Scotland [div. x.

imagine the position of a proprietor considering the proposal of 1702, it
might take shape in his mind as giving the immediate advantage of
Securing a mortgage at much less than the current rate of interest. Not
only so, but there was the contingent benefit that, supposing the pro-
posed trading side of the land credit succeeded, his dividends from it
might reimburse him a large part of the interest he had paid. On an
average profit of 20 per cent, on the proposed trading capital, calculated
as accruing from the payment of each instalment of interest receivable in
cash, such profit would repay nearly the whole of the remaining interest
which was to be returned in notes. Thus the proprietor, who joined the
scheme, would have his original loan for nothing and a dividend-paying
investment besides.

The fallacies of such a project — as for instance the inevitable deprecia-
tion of the obligations of the land bank — have been sufficiently insisted
on by many writers. But to obtain the true historical perspective it is
necessary to learn how a financial juggle, of the species described, appeared
to the men who were affected by it. That Chamberlain's proposals were
considered worth investigation is proved by the fact that the bank of
Scotland expressed a desire to be furnished with details of the scheme.
The proposer of the scheme had an interview with the directors at the
request of the court and produced papers and tables, showing the profit
that would accrue to the bank, if the project were carried into practice.
After some consideration the bank replied that the scheme "did not
agree with their present management," and declined to assist it^

Many other propositions of a similar nature were freely discussed, and
the effect of such efforts to tamper with the currency was very prejudicial
to the bank, in restricting the circulation of its notes. This might be
described as the Scylla of Scottish currency problems at the time. The
Charybdis was the opposite tendency to remedy the debasement of the
current money and raise it to the English standard. It was on the latter
rock that the bank came near making shipwreck. There were some
who maintained that the monetary stringency was attributable to
the depreciation of the currency, and one writer quotes with keen
enjoyment a remark supposed to be made by "Lord Burleigh in Queen
Elizabeth's time"" that "all the other remedies of banks, loans and such
like raggends of wit were monte-bank receipts for State-evils ^^ In
December 1704, a rumour spread over the whole kingdom that the
Privy Council was about to "raise the value of the several current

1 A Premonitor Warning or Advice, ut supra, p. 7.

2 A Proposition for Remedying the Debasement of Coyne in Scotland] Lib. Univ.

_^^ . , C. 10. 261 K
St Andrews — L p. 6.

Div. X. § 3] Cash Payment suspended 1704 263

species^'' When the remedy for the depreciation of the currency was
interpreted in this sense, there would be an obvious gain in holding the
" species '' to be raised in value, and therefore there was a great demand
for cash in exchange for bank-notes. It was alleged that the bank had ex-
ported bullion, and that the chief money, circulating amongst merchants,
consisted of bank -paper 2. However this may have been, the management
was taken unawares and on December 18th, 1704, the cash being
exhausted, it was necessary to suspend payment of notes'.

Though the bank met with this misfortune, its position was not
unsound. According to one writer, "the stoppage was foreseen and
might have been prevented." The scarcity of metallic money was
aggravated by recent exports of bullion, and the bank endeavoured to
provide money for small currency, by issuing £\ sterling notes {i.e. notes
for £\% Scots)*. It had been in the habit of holding cash against
one-quarter to one-fifth of the nominal amount of its notes in circulation".
Whether this limit had been over-passed or not is by no means clear,
and an examination of the books was made on the day after the stoppage,
as a result of which the following balance sheet was drawn up :

Bank of Scotland^.

Debit.
1704. Dec. 19th. £ s. d, £ s, d.

To Bank Bills charged upon the Trea-
surer p. accop. in Ledger d. fol. 3... 146,735 0 0
Deduct for so much thereof in the

Treasurer's hands this day ... 95,888 0 0
Remains nett of Bills running through-
out kingdom 50,847 0 0

Ballance due to the Adventurers ... 12,352 0 8^

Summa £63,199 0 8j

Credit.
1704. Dec. 19th. £ «• <^-

By cash in Treasurer's hands, remaining in old Merks ... 1,600 0 0
By debts due upon Heritable Bond, per particular a/c,

besides interest thereon 21,968 6 8

By debts due upon mov^ Bond, p. particulars, besides

running interest as above 27,682 8 6\

By Inland Bills, due per particular list besides running

interest ... ... ... ... ... ••• ••• 11^263 16 8

By the Bank office, for the first coast of their house

besides al reparations 694 8 lOg

Summa £63,199 0 8^

1 Historical Account of the Bank of Scotland, ut supra, p. 7.

2 The Circumstances of Scotland considered, 1705, p. 5.

3 Memorial and Intimation of the Governor and Company of the Bank of Scotland,
1704, reprinted in A Century of Banking in Dundee, by C. W. Boase, Edinburgh,
1867, pp. 19, 20.

4 Money and Trade Considered [by John Law], Edinburgh, 1705, p. 39.

6 Ibid., p. 38; MS. Pamphlet on a Land Bank by Patrick Campbell of Monzie,
quoted in The One Pound Note, p. 21.

6 A Century of Banking in Dundee, by C. W. Boase, Edinburgh, 1867, p. 21.

264 The Bank of Scotland [div. x. §

This account is interesting as showing that the liabilities consisted
altogether of outstanding notes, and also that the bank had been
influenced by land credit schemes in making loans to the extent of over
43 per cent, of its total liabilities on heritable property. The excess
of assets over liabilities amounted to dfi^l 2,352, which left the small sum
of ^£^2,352 as profit, after deducting the paid up capital of ^10,000 or
23J per cent. The payment of a dividend of 20 per cent, in the spring
of 1705 shows that there was no attempt to form a reserve fund at this
date. In fact the early policy of the directors seems to have involved
the division of almost all the profits made; and, up to the time of the
suspension of cash-payments, 90 per cent, had been distributed. The
prices realized depended on the dividends. In 1699 the former varied
from <^130 to ^£^133 Scots for the i^lOO Scots paid up, and in April
1704, 191|^ was recorded as against a book-value in the following
December of only 123J^

The governor and directors took prompt measures to allay public
anxiety. The adventurers authorized the court to postpone cash pay-
ments for two months, if necessary, and the notes were to bear interest
till they could be redeemed — a stage reached on May 1st, 17051 A
call was made from the shareholders of 10 per cent., realizing d^l 0,000
sterling, by way of loan, which bore interest of about 5 per cent., and
did not rank for dividend. By March 1706 one-half of the amount was
repaid and the remainder before the end of the year^.

This and the previous call of 20 per cent, had not been favourably
received by the English shareholders, and many refused to pay, with the
result that their shares were sold''. The effect of these and other sales,
as well as the suspension of 1704, was to reduce the price recorded in
1706 to 178J. The withdrawal of shareholders, resident in England,
caused a change in the management of the bank. At its inception half
the court had been elected by Scottish, half by English shareholders ^
Gradually more and more of the capital came to be owned in Scotland,
and the whole court was composed of Scotsmen, thirteen trustees being
chosen from the English proprietors to control affairs in London. Not
long afterwards the number of shareholders, resident in London, fell
below thirteen, and the appointment of trustees came to an end*.

By a curious coincidence, the fact that the bank was able to carry
on business, during the suspension, was adduced as an argument in

^ Vide infra f Summary of Capital ^ Dividends and Prices, p. 274.

2 Edinburgh Courant, No. 85.

3 Ibid., No. 118.

* Historical Account of the Bank of Scotland, p. 4.

* Vide supra, p. 256.

^ Historical Account of the Bank of Scotland, p. 3.

Biv. X. § 3] Law's Scheme for coining Notes 1705 265

favour of unsound money — thus Law supports his proposals for in-
convertible paper-money by showing that in the early part of 1705 the
notes of the bank "went, though there was no money" [in cash]\
Therefore the year 1705 was marked by a large number of proposals
relating to the money of the country. Chamberlain again came forward
suggesting that the notes of his proposed land credit should be issued as
tallies, " which would be nothing imaginary, but a solid and real worth,
being secured on land which has an intrinsic value as well as gold and
silverl" As before, the loan made to proprietors was payable in
" tallies," created by the land credit office. These tallies were return-
able in the payment of interest at 5 per cent., 4 per cent, of which
would redeem the principal in 25 years, and the remaining 1 per cent,
was retained for the expenses of the office ^

A peculiar interest is connected with another scheme originated by
John Law owing to its constituting the outline of the system which led
to the wild speculation in France fifteen years later. According to a
contemporary account, he was at this time living "by gaming and
sharping and, being a cunning fellow and nicely expert in all manner
of debaucheries, found a way quickly to get into my Lord Duke of
Argyle's favour and in confidence of his and the Squadroni (with whom
he was very intimate) their assistance, he presented a very plausible scheme.
All the Court and the Squadroni (except some that were monied men)
espoused the same, because it was found that in process of time it
brought all the estates of Scotland to depend on the government''.""
Law was acute enough to see that, on Chamberlain's proposals, the
depreciation of land credit notes was inevitable. The remedy for the
prevailing want of money, developed in Money and Trade Considered^
was the constituting of a Commission authorized by the State " to coin
notes," which should be the only kind of money receivable by this body.
These notes were to be circulated, in making loans on land to one-half
or two-thirds of its value or in purchasing estates ^ Another plan,
which has been attributed to Law, was the appointment of a similar
Commission, which would employ the notes it issued in establishing
a national fishery. The interest on the notes was to be a charge on
" the first and readiest profits " of the undertaking, and was payable

1 Money and Trade Considered, VjOb, p. 94.

2 Proposals of Dr Hugh Chamberlen and James Armour for a Land Credit, 1705,
p. 5.

3 Ibid., pp. 1-4.

* MS. "Memorials concerning the Affairs of Scotland from Queen Anne's
Accession to the Throne to the Commencement of the Union of the two Kingdoms
of England and Scotland in May 1707 " [Univ. Lib. St Andrews BN . 3 . 77], p. 59*

^ Pp. 85, 86 ; cf. Money and Monetary Problems, by J. S. Nicholson, London,
1901, p. 176.

266 The Bank of Scotland [div. x.

in gold at the rate of 3 per cent.^ Yet another proposition reverted
to the idea of a land bank, suggesting a loan in notes of this bank,
repayable in similar paper in twenty equal instalments^. A further
project described as "a land-mint" reached the stage of presenting an
overture of an act, which might perhaps be described as a mutual land
bank. This undertaking was to be divided into 1,000 shares, of which
any subscriber might acquire from one to twenty by giving good land
security to the value of £\00 sterling against each that he took up.
When 200 shares had been allotted the land-mint was to begin opera-
tions by " coining notes upon land^"

The public ignorance of finance may be gathered, not only from
schemes such as those already noticed but even more clearly from others
less honest. One projector, in an overture submitted to Parliament,
states that " he had his thoughts on paper-money as much as any man,
and was for some time of opinion that it wanted nothing but an act
of Parliament to give it a currency, but upon riper thoughts it is
evident no human power can force faith," and therefore, it is con-
cluded, paper-money is not a proper expedient to remedy distress*. If
faith could not be forced, the author is of opinion it could be deceived
by what he appropriately describes as "lye-money." The arguments
are as old as the debasement of currencies, what is new is the hint that
the bank of Scotland should be made the agent of the government in
the fraud. It was contemplated to obtain deposits of plate to the value
of .^^50,000, and coin it, by the addition of alloy, into cash of the
nominal value of ^75,000. The owners of plate were to receive .^50,000
of the new debased coins, leaving ^^25,000 to increase the capital of the
bank, which could pledge its credit to four times the amount or d^l 00,000.
This sum at 4 per cent, would produce ^^4,000, of which ^1,000 is
allowed for expenses, and the remaining d6*3,000 added to the cash
already in use. Once the process is started the propounder of it
promises remarkable results as may be seen by the following table :

Employment of lye-money hy the Bank of Scotland.

Deposit of plate worth £50,000 coined into £75,000

From which paid owners of plate £50,000 £50,000

Balance utilized by the bank £25,000

^ Two Overtures, S;c. — The First for supplying the present scarcity of coyn, and
improving Trade: The Writings of William Paterson, by S. Bannister, ii. p. xliii.

2 Parliamentary Papers, 1704— Overture for Establishing a Land Bank Office,
whereby the Nation may be rendered rich and happy.

3 Parliamentary Papers, 1705 — Act for a Land-Mint.
* Parliamentary Papers, 1705— Money Encreased and Credit Raised, Edinburgh,]

1705, pp. 1, 2.

Div. X. § 3] " Lye-Money " proposed 1705

267

Gross profit,

Nett profit,

Credit being

four times

"cash"

Year

being 4 °/o on
credit of

Less
expenses

being added to
cash of

Gash

previous year

25,000

100,000

4,000

1,000

3,000

28,000

112,000

4,480

1,000

3,480

31,480

125,920

5,036

1,000

4,036

35,516

142,064

5,682

1,000

4,682

40,198

160,792

6,431

1,000

5,431

45,629

182,516

7,302

1,000

6,302

51,931

207,724

8,309

1,000

7,309

Thus, according to these figures, there would remain an aggregate
gain at the end of seven years, sufficient to make good the amount
extracted from the "lye'' coinage and a balance of profit besides. It
was fortunate that, in the midst of these and other wild proposals for
tampering with the currency, there remained a body of sound opinion.
The author of the Occasion of Scotland's Decay in Trade, Edinburgh,
1705, supposed by some to have been Paterson, lays down the axiom
that "no bank can succeed without a considerable fund of cash to
answer necessary demands." This fact constitutes the radical objection
to Law's scheme " of an imaginary credit on tallies or notes," as well as
to the obligations of a land bank. It is argued that the forced circula-
tion of inconvertible paper-money would lead to the hoarding of cash,
with the result that metallic money would soon command a premium,
while conversely the tallies or notes of a land bank would begin to
depreciate. It is also asserted that such paper-money would not be
accepted at home, and as a consequence trade would be impeded and
foreign commerce (on the assumption that Scotland had an excess of
imports over exports in value) could only last as long as merchants had
bullion to exports This tract deserves praise as taking a firm stand on
the question of metallic money; and doubtless this and similar arguments
had weight with Parliament, which in 1705 " agreed that the forcing of
any paper credit by act of Parliament was unfit for this nation'^."

The resolution of the Estates disposed of the attempts to introduce
inconvertible paper, and the next important event in the history of the
bank of Scotland was the reform of the coinage as ordained by the Act
of Union. The bank of Scotland gained some credit by a mistake of
the Bank of England. The latter, on the payment of " the Equivalent,"
due to Scotland, sent ^100,000 in cash and .£298,085. 10^. in Exchequer
Bills, with a view to circulating English paper-money in Scotland.

1 Reprinted in The Writings of William Paterson, ut supra, ii. pp. li., lii.

2 Acts of the Parliaments of Scotland, xi. p. 218.

268 The Bank of Scotland [div. x. §

Scotsmen indignantly rejected the Bills, and it was stated that the
payment in cash of the greater part of the amount, due by England,
might have been avoided, had the bank of Scotland been entrusted with
a share in the operation ^ Probably it was for this reason that the
Scottish bank obtained the privilege of acting as agent for the govern-
ment, in calling in the existing Scots currency and issuing sterling
money in exchange for it. For the trouble involved, the bank received
a commission of one-half per cent.^ The value of the coins called in
is stated to have been ^£'411,117. 10*. ^d. sterling, so that the com-
mission, though small in amount, equalled more than 20 per cent,
dividend^. The indirect results were even more satisfactory, for the
bank was able to offer notes or sterling coin in exchange for the Scots
money paid in, and this experience brought the directors to see the
advantage of accepting deposits.

The eight years from the Union to the Rebellion of 1715 might be
described as the most profitable in the early history of the bank. In
the nine years from 1699, when a dividend was first declared, 126 per
cent, or an average of 14 per cent, was paid, while in the eight years
from 1708 to 1715 distributions were made of 178 per cent, or an
average of 22^ per cent. — those paid in 1713, 1714, 1715 being 30 per
cent, each year. Besides, the directors believed that the bank enjoyed
the support of the government, and it was not thought necessary to
apply formally for a renewal of the monopoly, which was due to expire
in 1716. Even before the Union, this question was discussed by the
management, but it was considered that no Scots Parliament would
sanction a rival bank ; and, after the Union, they were of opinion that
no institution founded by "foreign*" {i.e. English) capital would obtain
public support — a dream that was rudely dispelled in 1727^. The
recorded quotations of the shares show a similar confidence on the part
of investors. From the price of 178 J in July 1706, the quotation had
risen to between 190 and 204 in 1709 and had further advanced to 227f
in 1715.

These years of prosperity appear to have lulled both shareholders
and directors into a false security. As early as 1705, when, as has been
shown, the monetary position was critical, the adventurers did not
attend the general meeting in sufficient numbers to form a quorum,
and it was necessary to "desire and entreat them" to be present at
the adjournments The conservative policy of the directors in the first

1 The History of the Union [by Defoe], 1709, Appendix, p. 22.

2 Historical Account of the Bank of Scotland, p. 9.
^ An Introduction to Mr James Anderson's Diplomata Scotice, by Thomas Ruddi'

man, 1773, p. 175.

* Historical Account of the Bank of Scotland, p. 28.
6 Edinburgh Courant (26 March, 1705), No. 16.

Div. X. § 3] Position and Prospects 1707-19 269

few years of the eighteenth century had become accentuated as time
went on, and there was a want of foresight in meeting new developments
or being prepared for emergencies. The bank suffered from this attitude
in 1715, when, through the Rebellion, there was a run ; and, after it had
lasted for about eleven days, payment was suspended ^ The bank alleged
that the suspension was due to the fact that the cash, held on behalf of
the government, was lodged at the castle to prevent its falling into the
hands of the rebels^; but, if there was sufficient cash to meet the demands,
there should have been no insuperable difficulty in securing the deposits
of the government and at the same time honouring the obligations of
the bank. If the statement is intended to suggest that the suspension
was engineered from within the institution with a view to prevent
disaffected persons from obtaining cash, it would generally be held that
the officials of the bank had no right to usurp the functions of the
judicature, or to make the loyal suffer with the disloyal. It would
appear that either losses were made at this time, or else that the total
profits were not now divided, as seems to have been the case in the past.
In 1716 no dividend was paid, and for the next four years the distribution
was at the average rate of 18f per cent., as compared with 30 per cent,
for each of the three years 1713, 1714, 1715.

After the Rebellion there was a want of enterprize in the policy
of the bank. Before the Union, the ports of the East Coast had been
the chief trading centres, and the commercial pre-eminence of the district
round the Forth was unquestioned. After the Union the withdrawal of
the Scottish protective system damaged for a time the trade of the East,
but as a compensation, the opening of the colonial trade brought a very
remarkable prosperity to Glasgow and the West. The bank of Scotland
had not given sufficient attention to the new commercial developments,
and therefore complaints were soon made that Scotland wanted more
banking facilities'. Therefore from 1719 there were numerous pro-
positions to widen the area of the bank's operations, at first by an
addition to its capital; and later, when these were declined, by the
establishment of a rival institution in 1727.

The earliest proposal for increasing the capital of the bank came
from a group of the holders of Equivalent Debentures— this stock having
been issued at the time of the Union to provide "the Equivalent "" due
to Scotland. On the precedent of the Bank of England and the Million
bank, it was proposed that holders of these Debentures, owning in all
<£250,000 of the bonds, should add these to the capital of the bank.
The eff^ect of the operation, so far, would have been that the capital of

1 The One Pound Note, nt supra, p. 26.

2 Historical Account of the Bank of Scotland, p. 10.

3 Ibid., p. 11.

270 The Bank of Scotland [div. x. §

the bank would have stood at <£>350,000, of which ,^^100,000 sterlia
(being the original capital) would have been paid to the extent of
0^10,000 sterling and the remaining ^^250,000, being the subscribed
Equivalent Debentures, would have been fully paid. The interest on
these Debentures, which were a 4 per cent, stock, would have been
transferred to the bank.

To avoid the confusion of a co-existing fully paid and partly paid
capital, it was further suggested that, inasmuch as bank shares had only
10 per cent, paid, the new Equivalent capital should be transformed
to the same footing. This was to be effected by the bank paying the
subscribing Equivalent Debenture holders nine-tenths of their bonds in
bank bills at 5 per cent., leaving ^£^25,000 outstanding. This £%5Si00
was to be added to the paid-up capital, making the new capital £^50^^00
authorized and ,^35,000 paid up. The bank, as reconstituted, was to
receive the <^1 0,000 annual interest on the Debentures, d^600 for manage-
ment, and the benefit of £%fiOO per annum allowed for all pretensions
of growing equivalents, due to Scotland, and the disposal of =£^1 4,000
for encouragement of the Scottish woollen industry \

This scheme would have been justifiable to the bank shareholders
only had they been in serious want of new capital, which could not
have been raised except on onerous terms. As a matter of fact the
directors believed that they did not need any fresh capital ; and, even
had they required it, the proprietors were willing to subscribe the sums
asked, as they did some years afterwards. The new shareholders would
have gained to a large extent at the expense of the old. For a 4 per
cent. Equivalent Debenture, the owner would receive d^90 in bank bills,
paying him at the rate of 5 per cent., and ^^10 in bank shares. Sup-
posing the dividend of 20 per cent., paid in 1719, could have been
maintained, there would have been the following advantages in making
the exchange :

Position of owner of £\00 Equivalent Debenture.

Prior to exchange under scheme After exchange on amalgamation

for amalgamation £ s. d.

£100 at 4 7„— Income £4 90 % in Bank Bills at 6 % yield ... 4 10 0

10 7„ in Bank Stock at 20% yield ... 2 0 0

£6 10 0

This meant a gain of 62J per cent, in income to the new share- %
holders, but with a slightly decreased security. Conversely, there would
have been a material loss in the income apportionable amongst the
original shareholders, who, to gain ^^225,000 government stock, paying

^ Historical Account of the Bank of Scotland ^ pp. 12, 13.

Div. X. § 3] Scheme for Increase of Capital 1719 271

4 per cent., would have to give 5 per cent., besides surrendering five-
sevenths of the profits made under the new system. Whether business
would have expanded sufficiently to increase the bank's income to a
material degree is doubtful.

Another point to which attention is drawn was the position of affairs,
should the bank fail. The new shareholders would only lose the 10 per
cent, they held in bank stock, whereas the bank itself would have to
make good d^225,000 at 5 per cent., for which they had received
.^250,000 at 4 per cent.^ Besides these objections, there was, in
addition, the important consideration, that an enormous increase in
the liabilities of the bank would have been accompanied by no addition
to its resources in cash; for, although for book-keeping purposes, the
Equivalent Debentures would rank as "government securities,'' in the
first quarter of the eighteenth century such Debentures were far from
having the ready market open to a trustee-stock at the present day.
At the same time, while the bank was well-advised in declining this
particular proposal, it should not have adopted a non possumus attitude
to the demand for increased banking facilities, and it was from this
position of the bank itself that the danger of further opposition arose.

The proposer of the plan for extending the capital of the bank by
the inclusion of the Equivalent Debenture holders, received the rejection
of his overtures with a considerable amount of heat, and set himself
to the formation of another scheme, which it was thought would compel
the bank to receive new subscribers. In the next year (1720) he joined
with seventy-four others in forming a company known as the Edinburgh
Society for Insuring Houses against loss hy Fire. There seems reason
to believe that this was not a bona fide insurance undertaking ; because,
at this time, there was already in existence, another company, which
was doing a good business. In any case, it soon became evident that
the Edinburgh Society was not destined to obtain support in effecting
fire insurances. The management then declared that "insurance was
the small — yea the meanest part of their designs," and to mature their
wider plans a Committee of Secrecy was appointed. Subsequent events
showed the nature of the deliberations of this body. They collected
about d^8,400 in notes of the bank of Scotland and in actions of the
South Sea company. At the same time it was arranged that effbits
should be made to induce the public departments to withdraw their
deposits. Accordingly, the notes were presented, and the Commissioners
of the Equivalent withdrew the deposits standing to their credit. How-
ever the bank was able to meet both classes of demands for payment,
and the attempted run proved a fiasco. Still the Edinburgh Society

^ Historical Account of the Bank of Scotland, p. 15.

272 The Bank of Scotland [div. x. §

itV

thought that the bank woi;ild be more disposed, after an unpleasant*
experience of this kind, to accept certain proposals which were now
submitted. These were framed on the model of the amalgamation
between the Old and the New East India companies^ and provided that
the Edinburgh Society should purchase from the present adventurers in
the bank, 600 shares (or exactly one-half of the total capital) at £9^00
Scots or a premium of 100 per cent. It was evidently contemplated
that each shareholder in the bank should sell one-half of his shares ; and,
to prevent an " interregnum "" owing to directors becoming disqualified, •
it was proposed that, in any case where a qualification was reduced below
the statutory amount, the completion of the transfer should be post-
poned till after the next meeting.

The bank refused in peremptory terms to entertain this arrangement.
The Edinburgh Society made the mistake of offering a price to the
adventurers, which was lower than that realized at the last sale — the
latter having been 260 2, as against 200 now tendered. Apart from
this, the directors saw that once an arrangement of the kind suggested
was carried into effect, there would be danger of competitive bidding
for shares by both parties so as to obtain control of the bank. The
dispute, as far as it affected the Edinburgh Society in its corporate
capacity, came to an abrupt conclusion by the dissolution of that
company through the enforcement of the " Act against Stock-jobbingV'
but the same interests remained hostile to the bank and at last succeeded
in obtaining the establishment of the Royal bank in 1727.

It is a common experience that those, who have a fair case, enforce
it by bad arguments. The bank of Scotland at this period was scarcely
doing all a national bank should have done for the trade of the country.
But the most that could, in justice, be alleged against it was that the
management was ultra-conservative — and if any deviation from perfection
is permissible, this was the side on which safety lay in view of the
currency schemes of 1702-5 and the speculation at London in 1720.
It weakened the case of the opponents of the bank to allege that it had
failed in its duties in refusing to lend on its own stock. This course
was disastrous in the cases of the Darien and South Sea companies;
and, as rightly shown by the bank, would have lessened the security
of the public*. The reply to another charge, namely that the expenses

1 Vide supra, 11. pp. 169-73, 186-8. J

2 One of the inducements to subscribers in the joint-stock of a bank at Dublin
in the summer of 1720 was the statement that shares of £100 [Scots] in the bank
of Scotland sold for £250 [Scots]— MS. Letters of Archbishop King, Library,
Trinity College, Dublin, N.3.7, f. 50.

^ Historical Account of the Bank of Scotland, pp. 16-19.
4 lUd., pp. 37, 38.

Div. X. § 3] Capital 1695-1720 273

of transfers were too great, brings to light interesting evidence as to the
cost of buying and selling shares at this period. The stamp duty was
Qs. dd. and the fee payable to the bank, by both transferror and trans-
feree, was 20c?. sterling per share, this amounting to exactly 1 per cent.
by each of the two parties on the paid up capital, and one-tenth per
cent, on the nominal value of the stocks

Summary of Capital^ Dividends and Prices of Shares^ 1699-1720.

Capital.

The capital, authorized by the act of 1695, was £1,200,000 Scots, equal to
£100,000 sterling. A deposit of 10 per cent, was required from applicants for
stock, which realized £120,000 Scots or £10,000 sterling. The paid up capital
remained at £10,000 to 1720, but in 1696 a call was made for proprietors "to
advance" or lend to the bank 20 per cent, of the nominal amount of stock they
owned. The resulting payment of £20,000 sterling was regarded as a loan, and
ranked for interest as such, not for dividend pari passu with the first call of 10 per
cent. This £20,000 sterling was repaid in 1698. Again in 1704, another loan of
10 per cent., realizing £10,000, was called up, and this was repaid in 1706. The
share consisted of £1,000 Scots nominal or £83. 6*. 8c?., the amount paid up being
£100 Scots or £8. 6«. 8rf. sterling.

^ Historical Account of the Bank of Scotland, p. 38.

^ The materials for these figures have been supplied by the courtesy of the
Secretary of the bank of Scotland, Mr Daniel M^'Neil. I am also indebted to
Mr J. S. Barbour, formerly accountant of the bank, for reading and commenting on
the MS. of this Section. All quotations of the prices realized for shares were
expressed up to 1720 in Scots currency; to give an idea of the value of the
transactions in sterling the ratio between the Scots and sterling £ of 12 to 1,
mentioned in the company's act has been applied.

S. C. III.

274

The Bank of Scotland

[div. X. § 3

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SECTION IV. THE BANK ON TICKETS OF THE
MILLION ADVENTURE OR THE MILLION BANK
(1695-1796).

The foundation and history of the institution, formed as " the Bank
on tickets of the Million adventure,'''' but better known as " the Million
Bank," is of considerable interest as supplementing the materials for
information relating to the proceedings of the Bank of England. The
latter organization had been formed to induce capitalists to furnish the
State with a loan ; and the government debt, thus established, became
the security for the banking business of the company. The same idea
was acted on in 1695 by a group of private bankers, who had been in
the habit of lending money on pledges^, with the important modification
that the security for their credit was provided, not by a fresh loan to
the State but by joining together a number of independent holdings in
an existing loan. The security selected was the Million Lottery Loan
of 1694 from which (and not as might have been expected from the
amount of its capital) the undertaking took its title. The Million
Lottery Loan was divided into shares or "tickets'" of .sfi'lO each, some
of which were prize-tickets and the remainder " blanks."*"* The blanks or
"unbenefited tickets "*"* received a dividend of 10 per cent, for sixteen
years ; and, at the expiration of this period (i.e. by 1710), the interest
ceased, without repayment of the principal 2. The promoters of the
scheme did not endeavour to obtain any charter of incorporation but
contented themselves with enrolling a deed, corresponding to a partner-
ship-agreement, in Chancery. The terms of subscription were published
in March 1695, and provided that intending members might contribute
either in tickets of the Million Lottery Loan or in cash. The money
was payable as to 10 per cent, on application, 15 per cent, within
10 days after the first meeting and the remaining 75 per cent, in three
calls of 25 per cent, each at Midsummer, Michaelmas and Christmas,
respectively. It appears probable that for some years only 50 per cent.

^ Anderson^ Annals of Commerce j in. p. 156.

2 A History of English Lotteries , by John Ashton, p. 49, vide infra, Division x.,
Section 6.

18—2

276 The Million Bank [div. x. §

was actually called up. The terms on which the shares in the lottery
were accepted, in lieu of cash-subscriptions, are of especial interest in
view of the fact that this is the first operation on record in which a
government security was converted into the stock of a trading company,
and this early instance of such a transaction acquires importance from
the similar conversions on a very much larger scale undertaken later by
the South Sea company. Although the blanks in this lottery were of
£\Q each nominal, they were quoted in the market in March 1695 from
£"1 to £1. \s, per ticket. The proposal of the company was to accept
seven tickets as equivalent to a cash payment of ,^50, so that ^49. Is.,
expended in the purchase of tickets, would secure £bO in stock. A
discount of \0s. per ticket was allowed for prompt payment and thus
thirteen tickets were exchanged for £100 stock. Therefore the transac-
tion may be restated as follows — a person who subscribed ^130 in the
lottery and failed to draw a prize, might, by prompt application,
exchange these tickets (which would have sold for about ^91 in the
market) for d£*100 Million bank stock. Prize tickets in the lottery
received a varying higher rate of interest for the specified term ; and
these, on conversion, were allowed half a year's extra purchase, i.e. about
14| years instead of 14J. It was also arranged that the promoters of
the scheme should receive \ per cent, on the total subscription. The
affairs of the company were to be controlled by a body of twenty-four
managers or committees, each of whom must hold at least ^500 stock,
the minimum qualification for a vote was =£^300 stock, and it was
ordained that no proprietor might have more than one vote^ It was
also arranged, according to a contemporary advertisement, " that no one
would be further answerable than the amount of his stock ^.^

The advantages of this proposal were obvious. The persons who
owned shares in the Lottery had only a wasting investment, and both
principal and interest disappeared in less than sixteen years. By
exchanging their tickets for stock in the Million bank they had a
prospect, on the success of the undertaking, of converting a terminable
income into a perpetual one. On the other hand, the holding of a
large quantity of the Lottery Loan by the bank constituted a fairly
adequate, if not an ideal security, for its banking business, and one
too which yielded the very high return of 13 per cent, on the price at
which the tickets were exchanged into stock.

• 1 Houghton, Collections, No. 139 ; An Abstract of Proposals for the Bank on tickets

of the Million Adventure fBrit. Mus. ^^^'oT' "^^ j? ^^^ ^f ^^ 'Severn/ R^versionai-y

Annuities to which the Million Bank are entitled \ A Fund for granting Annuities with
terms for joining the Million Bank.
2 Houghton, Collections, No, 140,

Div. X. § 4] Million Loan Stock ''subscribed" 1695 277

The lists for subscriptions were opened on May 24th, 1695, at the
Out-ropers' Office, near the Royal Exchange^; and .£^200,000 was
subscribed, on which by October .£1 00,000 had been regarded as paid
up according to the agreement 2. On October the 31st it was announced
that a new subscription would be taken either in money, annuities or in
lands (the latter being a hint borrowed from the land banks) ^ The
amount of rentals, derivable from land to be subscribed, was limited to
^7,000 a year. At the same time it was announced that money would
be lent, on approved security, at 6 per cent. ^ During the first year of
the company's history it engaged in banking and in issuing annuities,
and it was evidently considered advisable to proceed cautiously in the
payment of dividends for, although 13 per cent, was received from the
State on the part of the capital issued against the lottery tickets
subscribed in 1695, a dividend of only 2 per cent, was paid for the
period from the commencement of business to September 1695°. By
1696 it was alleged that the management of the banking business had
not been successful, and it was resolved on June 23rd, 1696, that " it
was not to the interest of the society to continue banking any longer,"
and by September it was decided to cease to issue annuities ^

From the end of the year 1696 to 1699 the company had no very
definite plans. It had been formed to found a bank and had given up
the intention after a very short trial. Meanwhile the period at which
interest on the Lottery Loan of 1694 would terminate was approaching;
and, unless some means were discovered of earning revenue, the com-
pany's capital would have disappeared by 1710. This contingency was
foreseen ; and, once banking had been relinquished, the committees
began to provide a sinking fund, out of the income received, to provide
against loss of capital. The funds obtained in this manner, together
with the remainder of the cash subscriptions, were invested in the
reversions of single life annuities issued in 1693 and 1694. These
reversions had come into existence in the following manner. One of
the first English loans was that raised in the form of annuities on lives.
If the applicant nominated one life only, he received 14 per cent, during

1 Houghton^ Collections, No. 148.

2 Post Boy, October 12, 1695. From the Postman of May 30, 1700, it appears
that £20,000 was withdrawn, the capital regarded as paid up being for some time
£80,000. This was twice doubled by further subscriptions.

3 Vide supra, pp. 246-52. * Post Boy, Oct. 31, 1696.

^ A scheme for making a fund for granting annuities for lives. . . Brit. Mus.

33^ ^1 ' ^^*^ ^^^^ ^^*' ^^' ^^^^'

« Parliamentary Papers (vol. 96 of the General Collection VJQ2-2>)— Account of
the Transactions of the Million Bank.

278 The Million Bank [div. x. § 4

the continuance of that life, hence this security was known as "the
14 per cent, annuities," or alternatively 12 per cent, on two lives
nominated, or 10 per cent, on three lives. By subsequent enactments,
these annuities on lives were converted into annuities for 95 years from
1694 on additional payments of from 4 to 5 years' purchase. In some
cases the annuitants did not pay the extra capital for the protraction of
the term to one of 96 years, and outsiders were allowed to do so^ This
train of events gave the Million bank its opportunity ; for, by purchasing
reversions of the 14 per cents, out of the surplus income not paid as
dividend, a new source of revenue would in time be formed, which would
take the place of the Lottery Loan interest on its determination in 1710.
There remained however one element of uncertainty, for if the bene-
ficiaries of the 14 per cent, annuity, the reversions of which were
purchased by the company, proved long-lived, a gap might occur
between 1710 and the period at which a considerable part of the re-
versions would bear income. To bridge this gap purchases were made
of the interests of various annuitants of the 14 per cent, class, so that
the company finally evolved a plan of building up a permanent income
out of an interest-payment for the short term of sixteen years. This
system also afforded advantages to persons who held 14 per cent,
annuities, secured on the lives of others, as an investment; for, by placing
their capital in Million bank stock, they obtained an automatic insurance
of a moderate return on their investment and were safeguarded against
the risk of loss through an early death of the nominee. This plan,
having been tried experimentally for some years, a resolution was passed
in November 1699 empowering the committees or directors either to
purchase life-annuities, in cases where the company already owned the
reversion^ and conversely to sell the reversions in other cases to the
persons who owned the life-interest 2. The produce of the sales was to
be employed at the discretion of the directors for the benefit of the
society.

One weak point in the scheme, as it existed in 1699, lay in the fact
that by 1710 the sinking fund would not have had time to have com-
pleted the redemption of the capital represented by lottery tickets,
therefore in 1700 a new subscription was authorized. The proprietors
had the right of doubling their present holdings (which would make the
stock fully paid) for one month from May 30th, afterwards applications
were invited from the public. Subscriptions might be made in annuities,
reversions of annuities, or lottery tickets. Reversions of a 14 per cent,
annuity were valued at £SS\ and, to secure .^'lOO stock, such a reversion
was accepted with a payment in cash of £11. The complete 96-year

^ Earlier Years of the Funded Debt, pp. 3-5 ; vide infra, Division x.. Section 5.
^ Account of the Transactions of the Million Bank, ut supra.

Div. X. § 4] Further Subscriptions 1699, 1700 279

annuity {i.e. original life interest and reversion) was valued at £910:
Million lottery tickets, with 11 years' interest to be paid, at £1, 5s., those
with 10 years' currency at £6. 5s.'^ It is interesting to notice that,
although nearly one-third of the life of the tickets had now lapsed, they
still sold at nearly as high a price as at the formation of the company,
and therefore almost all the investments purchased out of the sinking
fiind would constitute profit, supposing it had been possible to sell the
company's tickets at the price it was prepared to value them at for
subscription. By June 14th, 1700, a further allotment of stock was
made and it was then proposed to increase the capital to ^^320,000'^.
Subsequently the total stock was fixed at .£500,000, at which it remained
until the winding-up of the undertaking.

Owing to the separation of interests in an annuity for 96 years,
the life-interest and a reversion of another life-interest were not so
valuable together as the single complete estate for the residue of the
term. The Million bank gradually founded a profitable class of business
in securing the whole annuity. Accordingly, the directors were authorized
on July 7th, 1702, to exchange reversions for other reversions, where a
profit could be made — in 1703 the charge for exchanging a reversion
was £50 on each 14 per cent, annuity — and on November 3rd, 1703,
they were empowered to sell the "absolute terms" (i.e. the complete
annuity). On April 26th, 1704, insurances were effected on the lives
of nominees, where the company owned the life estate only^ By 1710
the undertaking was established at the " Million Bank House," Nag's
Head Court, Gracechurch St., and it announced that reversions would
be sold at o^llO and estates for life at .£100— these prices showing,
as might have been expected, a decline in the value of the life-estate
and an increase in that of the reversion. Exchanges of reversions were
now made for a premium of d£*35*.

The quotations of Million bank stock are of considerable interest
as throwing light on market conditions at the beginning of the eighteenth
century, and also for purposes of comparison with those of the Bank of
England. Up to the summer of 1700 the stock was only £50 paid, and
in the early part of the year it is occasionally mentioned in this form at
about 23. After the increase in the capital, this company appears
regularly in the contemporary share-lists. Being virtually an invest-
ment-trust in government stocks such quotations supply a great want
in the history of the finance of the period — namely that of prices of a
standard State security, which would occupy the same position in relation

1 Flying Post, Jan. 27, 1700; Postman, May 30, 1700.

2 London Post, June 14, 1700.

3 Account of the Transactions of the Million Bank, ut supra ; Postman, August 7, 1703.
* Postman, Feb. 8, 1710.

280 The Million Bank [div. x. § 4

to the money-market then as Consols do at the present time. Both the
Bank of England and the East India company earned a part of the
dividend paid from the interest received from the government on
the respective debts due to them, but the total dividend in each case
was subject to the risks of trading. Besides, the price of Bank stock
was affected (as has been shown elsewhere^) up to 1707 by the repay-
ments of the engrafted capital, while that of East India stock did not
become a really standard stock, from which the yield on capital might
be calculated, until the completion of the union of the old and new
companies in 1709. Therefore the existence of a series of quotations
of an investment-trust in government stocks from 1700, such as those
of the Million bank, is of the greatest importance in the exact study of
the finance of the period. The element of trading risks is eliminated,
and the recorded prices of the stock remain the average of those of a
group of representative government securities. Further, there was
considerable fluctuation in the dividends on Bank stock ; and, according
to a statement furnished officially by the Million bank, its dividend was
constant up to 1728, being a regular 5 per cent.^ But there is some
doubt as to whether this statement is absolutely accurate; for, in the
list published by John Freke during the years 1715 and 1716, the
dividend is given at 6 per cent, instead of 5 per cent., and a comparison
of the yields of the various securities of the period tends to confirm
Freke*. If however, as is probable, there were slight departures from
the regular 5 per cent, dividend, these would be in the earlier period,
and would depend on the general return on government loans, so that
the prices of Million bank stock may be taken as those of the average
State security.

In August 1700, when Million bank stock was first quoted as fully
paid, the stock-market was favourable to holders of securities. From
February 1697 there had been a great advance in quotations which had
culminated in March 1700, when Bank of England stock had touched
148 J, having almost trebled in price in three years. In August the
quotation was from 138 to 142 and in the same month Million bank
stock was dealt in at 97. From 1700 to 1707 the money-market was
affected by a combination of unfavourable circumstances. At the end
of 1700 there was the dread of foreign complications, in February 1701
a run on the Bank of England, in 1702 came the outbreak of war,
in 1704 another drain on the cash of the Bank of England, and the

■ 1 Vide supra, pp. 214-24.

2 Account of the Transactions of the Million Bank, ut supra ; Anderson, Annals,
III. p. 157 ; The Stocks examined and compared, by William Fairman, p. 53.

' The Prices of the Several Stocks, Annuities, and other Public Securities, London^
1715-16; for a specimen of this list vide Plate I. of this vol.

Div. X. § 4] Prices of Stock 1700-5 281

strain of the war began to be felt through a greater scarcity of capitals
These causes, all tending towards stringency in the money-market and
the insecurity of capital, co-operated in depressing the price of Million
bank stock. From the quotation of 97 in August 1700 there was an
almost continuous decline until 1707, interrupted temporarily by occa-
sional favourable news from the seat of war. By the end of 1700 the
stock had fallen from 97 to 79. The run of February 1701 caused a
further fall to 61 ; and, by May 14th, the stock was as low as 59.
From July to the end of October quotations varied between 65 and 59,
falling in November to 58 and in December to 57— a decline in a year
and a half of 40 or of over 41 per cent. This was the lowest recorded
price of Million bank stock. In 1702 the quotation remained low till
June the 10th ; and, from the beginning of the year till that date, the
extreme fluctuations were between 58 and 60. From the middle of June
till the end of the year the price rose, with a few relapses, and closed in
December at 77, a gain of 20 in a year. The lowest quotation of 1703,
namely 73, which was recorded on February 24th, was but little below
the highest of the former year and 77 was reached by April 21st; and,
from that date till September, the stock advanced steadily closing at 94,
this was the best price from 1701 till 1715. Towards the end of 1703
and during the first months of 1704, the quotation was lower, varying
from 84f to 87J until February 23rd. In the last week of February
there was a slight rise in the stocks of both the Bank of England and
the Million bank, and from February 28th to March 1st both touched
the highest prices of the year, the latter standing at 91 f . For the next
nine weeks the price was steady above 90, but in June there was a faU
to 86^. By August 11th the quotation was again over 90, and it
remained between that price and 88 until the dividend was deducted on
September 29th, when 85^ is recorded. During October the stock was
lower, and on the 30th the lowest price of the year, 82, was touched.
Although in 1704 the quotation had not been as high as in 1703 the
average was better, as the lowest point in the earlier year had been only
73. There was a recovery in November and December, and the closing
price was 85, repeating that current at the end of September. In
October 1704 the uncertainty of the monetary outlook had exercised
a depressing influence on the money-market, and the after effects of the
crisis were apparent in 1705. The highest price of Million bank stock
for that year was recorded early in January, namely 85, and afterwards
there was a fall until 79 was quoted on March 16th. In spite of the
war and the frequent shocks to credit, it was a satisfactory sign of
the soundness of the national finance and the feeling of confidence in
the Million bank as an investment-trust that the lowest price of 1705

1 Vide sujyra, pp. 216, 217.

282 The Million Bank [div. x. §

was the same as the highest in 1701. By April 2nd the stock was ai
80, and it rose to 82 J on the 13th. There was a gradual fall till thej
beginning of July, when 80 was again quoted. By August 31st ihi
price was once more 82|-, and 83 was reached on October 17th an<
84 on November 16th, the price at the end of the year being 83 J. Th<
chief point of interest in quotations for 1706, which varied from 86
to 78, is the contrast of this comparative steadiness with the great
fall in Bank of England stock. The state of trade was very bad, and
towards the end of the year many merchants failed^. This depression
and the resulting suspension of credit caused Bank of England stock
to fall from 91 in February to 76J at the end of October — a total of
14|. During the same period the fluctuations in Million bank stock
did not exceed 8, and the lowest price of the year was 78. The mean
between the extreme quotations of the two stocks respectively was
nearly the same — being 83| in the case of the Bank of England and
82 in that of the Million bank. Although the fall in Bank stock
had been greatest, this security showed greater elasticity in recovering
than that of the Million bank. The latter fluctuated in 1707 from
8^ to 77, giving an average price of 80, and in 1708 from 83 J to 78,
or an average of 80|. Thus in the four years from 1705 to 1708 the
highest price was 86 and the lowest was 77, giving averages for 1705 of
82, for 1706 also 82, for 1707 80 and for 1708 80|. Against an
extreme variation of 9 points in this period in Million bank stock, that
of the Bank of England had fluctuated no less than 44 points, from
120J to 76i.

After the period of comparative steadiness in Million bank stock
from 1705 to 1708, a fall began again in 1709 which culminated in
1711. The largest fluctuations occurred from January to May in 1709
when the stock opened at 77 — a fall of 3 from the price current in the
previous July. Fears of a French invasion accentuated the relapse in
price, and the stock touched 73J on May 6th, the lowest quotation of
the year. Then came news of the De Torcy peace negotiations^ ; and,
on May 24th, 81 1 was recorded, this as it turned out being the best
price of the year. Till the end of 1709, the stock lost ground, falling
gradually to 75 in the last fortnight of December. The relapse was
continued till the middle of January 1710, when 73 was quoted from
the 9th to the 20th. In spite of the trial of Sacheverell and the riots it
occasioned on February 28th, the stock rose during that month, probably
on early information that France had made overtures for a conference to
arrange terms of peaces On March 1st Million bank stock was quoted
at 79, the highest price of the year. Gradually it became known that

1 Boyer, Reign of Queen Anne, p. 212.

2 75^^.^ pp^ 376-82. 3 ii^id,^ p. 450.

Div. X. § 4] Prices of Stock 1706-13 283

the peace negotiations were not likely to succeed, the health of Anne
occasioned uneasiness, and there were evidences of Jacobite activity.
These causes and more especially the latter, since it was feared that
the restoration of James would be followed by the repudiation of the
national debt, exercised a prejudicial influence on the price of public
stocks. That of the Bank of England fell to 95| in November and
while it rallied, Million bank shares continued to fall, touching QQ\ in
December. The time had now come when interest on the Lottery Loan
tickets lapsed, and it may have been feared that the Million bank would
suffer. The same causes continued to depress the quotation until the
beginning of September 1711, when 58 was recorded. This was the
lowest price, not only of that year but since 1702. Comparison of
the average price of 1711 with that of the period from 1705 to 1708
shows the magnitude of the fall. In the earlier interval the average
quotation was from 82 to 80, whereas in 1711, it was only 62 J, or a loss
in less than three years of nearly 25 per cent.

October 1711 marked the turning-point in the period of depression
that had set in since 1710. The stock was quoted in that month at 61
to 61 J ; and, on December 7th, 62 was recorded. In January and
February 1712 the price was from 61 to 61^, but early in March, for
reasons that led to a similar improvement in Bank of England stock,
there was a sharp rise — 69 being quoted on the 6th, a gain of 8f in less
than a fortnight. This was the highest point of that year. Towards
the end of the month householders in London were greatly disturbed by
exaggerated reports of the barbarities charged against " the Mohawks,""
which were alleged to have a political origin ^ These rumours became
so general that business was impeded and the recent advance in Million
bank stock was lost, 60, the lowest price of the year, being recorded by
the end of the same month. During April the stock remained flat, but
in May there was a rise to Qb on the 16th and to 67 on June 7th. On
July 11th 68 J was quoted. In August the price was about 67 and on
September 19th m\. The latter figure was maintained after the deduc-
tion of the dividend ; and there was a gradual improvement, in view of
the approach of peace, during the remainder of the year. By November
21st the stock was again at m^ and by December 26th it was 69. This
quotation was repeated on January 2nd, 1713, and afterwards the price
fell away to 67 on February 13th (that being the lowest of the year)
recovering to 69 on March 6th. Again there was a slight relapse, and
69 was recorded on May 22nd. Afterwards the stock rose steadily,

1 Boyer, Reign of Queen Anne, p. 550. They were said to have " in an inhuman
manner, without any provocation, assaulted and wounded those they met in the
streets, slitting or flattening peoples noses, gagging or distending their mouths with
iron instruments, and committing many other extravagant cruelties."

284 The Million Bank [div. x. § 4

reaching 87J on December 4th. This was the highest price of the year,
and showed a total gain since February of 20J — the widest fluctuation
since 1701. The total rise since 1711 was 29f or nearly 52 per cent.

The early part of the year 1714 was rendered memorable by a crisis
caused by a false report of the death of Queen Anne. Million bank
stock suffered from the general fall. It had been 84 early in January,
and by April 10th it was as low as 78f. Once the feeling of nervous-
ness had been overcome and it was believed that the succession would
be peaceable, the. quotation advanced; 80 was recorded on April 16th
and 90 by September 13th. At the end of the year the price reached
93f , thus for the first time in ten years being above what might be
considered par for the securities originally subscribed. In the first half
of 1715 the rise continued, and 100 was reached on May 13th, and this
quotation was maintained till the end of the month. Soon afterwards
the deduction of the dividend made the price appear lower, and in the
autumn the possibility, and later the actuality, of the Rebellion inter-
rupted the advance in prices that had continued since 1712. By
November 10th the quotation was 88, on the 11th it fluctuated from
88J to 88J. Then, on the arrival of favourable news from the army,
it was 89J, 89f on Saturday the 12th, rising further to 90J— 91 on the
14th, and touching 92J on the 15th. On the 16th it was 93 to 94|,
and 95 was reached on the 22nd. After a temporary relapse, 95 was
again recorded on December 2nd, and 96 ^ was touched on the 6th.
Except for a sudden advance to 98, the stock was steady about 96 for
the remainder of the month. Allowing for the deduction of the
dividend, the price was steady during the first quarter of 1716, 96 being
again quoted on March 23rd.

In April 1716 the rise that had been interrupted by the Rebellion
was resumed. On the 25th of that month the quotation was 101, and
in May it varied from 100| to lOOf. By June 11th 102| was quoted,
and 103 on the 14th. After the deduction of the summer dividend, the
price was 96^ on June 25, and from that date dealings do not appear
to be recorded till January 1717, when the stock was 108 ex dividend.
By the middle of March it had lost 4, the price, which was the lowest
of the year, being 104. This fall had been recovered by April 19th,
when 106 is again quoted. There was a remarkable rise during the
remainder of the year. The stock advanced as much in a month as
it had gained or lost in the whole year of 1708. Thus in May the gain
was 5|, from 108 to 113 J, and almost the same amount in July, when the
improvement was from 114, ecu dividend, to 119. By December 20th
the quotation was 124, an advance of 20 in the year. In 1718, although
the gain was much less — being only 2 to 126, the highest price of the
year — the stock was steadier, for the extreme fluctuations were from

Div. X. § 4] Prices of Stock 1714-20 285

that figure to 118 or only 8 as against 20 in the previous year. The
quotation was highest in January and February, the natural reaction
after the sustained advance since the Rebellion was accentuated by the
tension existing between Britain and Spain. Thus the price, which had
been \91^ ex dividend in July, had fallen to 120 by the end of August
and 118 on October 10th. By the end of November, there was a
slight improvement, and 119 was recorded for the rest of the year and
on until January 16th, 1719. On January 30th the stock was 120
and, from February 6th to the 27th, 122. The latter was the highest
price of the year, and was 4 below that of 1718 and 2 less than that
of 1717. By March 13th the quotation was again 119; and, after
a moderate relapse, the same figure was recorded at the end of April.
During May and June also (making allowance for the deduction of the
dividend in July, August and September) the price remained about 120.
On October 14th the stock was at 119^, but had fallen by the 30th to
115:1 (the lowest price of the year).

Once the South Sea scheme was mooted the position of the Million
bank became a very interesting one. It held a large amount of the
securities which the South Sea company was anxious to convert. Up
to the time that the proposal was conceived. Million bank stock, as a
general rule, had been slightly higher than that of the South Sea
company, but on January 1st, 1720, this position was reversed, for
on that day the latter security was \9,S\ to 128|, while the former was
126. When South Sea stock advanced rapidly that of the Million
bank, though improving, moved much more slowly. At the beginning
of February it stood at 130, and on March 4th at 138, touching 140
on the 18th. When the terms for the exchange of Long Annuities
were announced in April it was seen that, supposing the Million bank
converted those it owned, it would make a large paper-profit. It had
purchased its annuities at from 14 to 15 years' purchase, and it was
now offered 32 years' purchase. There are various reasons to favour
the opinion that the company converted a part and held a part. Then,
on the stock received for the portion converted, it borrowed large sums
from the South Sea company, which it used to purchase more stocks
The apparent profits, made by the conversion and the anticipated
profits from the South Sea stock purchased, caused speculators to form
a favourable opinion of the prospects of Million bank stock and the
price rose as high as 440 in June. This was exactly the same as the
highest price touched by East India stock at the same time, but it
is to be remembered that the latter started at the beginning of the
year from 200 and the former from 126. The quotation of 440 for

1 Report of the Committee of Secrecy on the South Sea Company, Jourmils of the
House of CommxmSy xix. p. 435.

286 The Million Bank [div. x. § 4

Million bank stock compares with ^QB for that of the Bank of England.
The latter had hitherto, except on a few occasions, stood higher than
that of the Million company, but the one had the support and the
other the hostility of the South Sea company, and the disparity in
the prices in 1720 shows that the absorption of the capital of the
Million company was looked upon as likely to be on favourable terms,
while that of the Bank of England would be less advantageous to its
shareholders.

The company was remarkably fortunate in escaping from being
involved in the collapse of the South Sea company. Evidently the
directors had withdrawn from speculation in good time ; and, for the
part of the annuities they had converted, they received a stock which,
though redeemable, was not subject to depreciation in the same way
as their terminable annuities. Up to 1728, 5 per cent, dividends were
paid ; thereafter, for nearly seventy years, a regular payment of 4 per
cent, was made. Out of the surplus income derivable from the annuities,
which were not converted, additions to the sinking-fund were made, and
by the end of the century, when these annuities were due to cease, the
company had formed a reserve fund in excess of its nominal capital.
On April 6th, 1796, all the annuities had been disposed of, and there
was no reason for the existence of the institution beyond the receipt of
the dividends paid it and the distribution of these amongst its members.
Accordingly, a petition was presented to Parliament praying for an act
to dissolve the society and to divide its assets. On the act being passed,
the company was wound up, after an existence of just over a hundred
years. During that period, by prudent management and the payment
of moderate dividends, it had managed to save enough out of the
high income receivable on securities where there was no repayment
of the principal, not only to accumulate a sufficient reserve to replace
the original capital, but to add considerably to it. Thus instead of
the subscribed capital disappearing with the annuities in which it had
been invested, the steady appropriations to the sinking fund with
compound interest had created a new capital that materially exceeded
the original one.

The following were the investments in government and other
stocks owned by the company at the date of its dissolution in

1796 :—

New South Sea annuities £40,000

£12,000

£17,718

... £230,000

... £234,000

... £283,0001

^ Accmmt of Million Bank stock in Parliamentary Papers, vol. 96 (of the General
Collection).

South Sea stock

Million bank stock

Consolidated 3 per cent, annuities

,, 3 ,, reduced annuities

Div. X. § 4] Capital, Prices of Stock 1700-20

287

The realization of these investments left a very considerable surplus
over and above the nominal amount of the half-million stock, so that,
on the completion of the liquidation, the stockholders received a
large bonus.

Summary of Capital and Prices of Million Bank stock^.

Capital.
£500,000.

Prices of Stock.

Year

Date of highest price

Highest and
lowest prices

Date of lowest price

1700

Auff. 21

97-79

Dec. 24

1701

Jan. 1

79-57

Dec. 10—24

1702

Dec. 23—30

77—58

Jan. 21—28, Feb. 25 to April 8

1703

Sept.

94—73

Feb. 24

1704

May 1—15

911—82

Oct. 30, 31

1705

Jan. 5—17

85—79

March 16

1706

May 24, June 3

86—78

Dec. 3, 24

1707

Au^. 25

83—77

Jan. 31, Feb. 17, July 18—28

1708

March 8—10

83i— 78

April 30

1709

May 24

8l|— 78;

May 6

1710

March 1—3

79—661

Dec. 1, 20

1711

Jan. 10 to Feb. 6, April 4

66^—58

Sept. 5

1712

March 6, Dec. 26

69—60

March 28

1713

Dec. 4

87i-67

Feb. 13

1714

Dec. 17

93|— 78|

April 10

1715

May 13—27

100—88

Nov. 10

1716

June 15

103 92

Jan. 30

1717

Dec. 20

124—104

March 8-29

1718

Jan. 3 — 11, February

126—118

Oct. 10

1719

Feb. 6—27

122— 115i

Oct. 30

1720

about June 25

440—126

Jan. 1

1 The amount of the dividend has not been added in this table ; because, although
there is ample apparent authority that the payment made was a uniform 5 per cent.,
it appears that actual distribution may have been 6 per cent, in 1715 and 1716 {vide
supra, p. 280). If 6 per cent, was paid in these years, it would be probable, in view
of the reduction that had then been made in the rate of interest on government
securities, that, prior to 1715, the dividend on the whole exceeded 5 per cent. The
reduction of the Million bank dividend to 4 per cent, in 1728, at the same time that
the interest on certain public stocks was lowered to the same amount, suggests a
general relation between the two sets of payments. Should this have been so, the
5 per cent, dividend on Million bank stock would have been paid from about 1717
to 1727, and from 1710 to 1716 it may have been 6 per cent.

SECTION V. THE GOATERNOR AND COMPANY
OF THE MERCHANTS OF GREAT BRITAIN
TRADING TO THE SOUTH SEAS AND OTHER
PARTS OF AMERICA AND FOR ENCOURAGING
THE FISHING.

A. The Position of the South Sea Company in relation
TO Public Finance from 1711 to 1719.

While the South Sea company had been formed ostensibly as an
undertaking for developing foreign trade, the real explanation both of
its origin and collapse is to be found in its relation to the finances of the
State, Therefore it will be convenient to deal with its history in close
connection with the banking and financial companies, since its influence
aflPected these more immediately than those of the group in which its
title would lead one to place it.

In fact the proceedings of the Bank of England and the South Sea
company are conjoined \»dth much of the finance of England up to
1720, and more particularly with the formation and early growth of
the funded debt. The function of the Bank of England in aiding the
financing of the governments of William III. and Anne has already
been explained^ ; but, fit)m certain causes that will be detailed below,
there had grown up a large indebtedness by the beginning of 1711 for
which the Bank was unable or unwilling to provide, and it was in order
to convert this floating debt into a funded debt that the South Sea
company was incorporated. Thus at its inception this imdertaking was
in certain respects supplemental to the Bank.

To understand the origin of the South Sea company, it is necessary :
to summarize briefly the beginning and the growth of the National Debt
from 1693 to 1711. During these nineteen years England was at war
for fifteen, and the wars proved costly. Money had to be raised, and
this was attempted in various ways. At first, the government flntici- ■
pated supplies, arising out of taxes voted by Parliament by the issue

' Vide iupra, Division z.. Section 1.

Div. X. § 5 a] Government Loans 1693-5 289

of tallies, which entitled the owner of them to the money raised, when
it had been collected, with interest in the meantime. But it was not
long before the expenditure grew so great that the payment of the
tallies became uncertain, and they could only be drcolated or sold at
a discount which, by 1697, was at least 40 per cent. Therefore it soon
became apparent that additional issues of tallies would be ruinous,
and that a time came when such issues could no longer be continued.
Although the revenue did not show the great elasticity necessary to
finance the war by means of tallies, the existing taxes would suffice
to proWde interest for loans which the State was not bound to redeem
before a distant date. The next step was to decide what fonn the loan
was to take ; and, in a new departure of this nature, several expedients
were open to the ministry. From 1693 to 1695 three different methods
were adopted, all of which appealed to the enterprizing or speculative
spirit of the time, and which were followed, with minor modifications,
for many years.

The first device was the "Tontine Loan" of 1693 (so called from
the name of the inventor — Lorenzo Tonti), which was divided into
shares of =^100 each. Eveiy subscriber could nominate a Ufe, during
the continuance of which he received 10 per ooit. until 1700, and
subsequently 7 per cent, on the capital subscribed was divided amongst
the remaining nominated lives ; so that in a few years the share of those
whose nominees were still living would be considerable. The same act
authorized the grant of annuities on a single life at a return of 14 per
cent, during the continuance of the life nominated. It wiU be obvious
that the 14 per cenL single-life annuity was the more favourable
investment; and so, of the million eventually subscribed, over 89 per
cent, was taken up in that form. This method involved a heavy annual
charge ; for, evai on the reduction of the payment to the Tontine after
1700, supposing at that date all the lives nominated for the 14 per cent-
annuities were in existence, the annual charge would be about 13 pa-
cent. The sen-ice, required for the single-life annuities, would tend to
decrease yearlv, wiule that required for the Tontine would be OHistant
till the last life lapsed. The objection to the Tontine was the gambling
element it involved, and there was also considerable uncertainty about
the return on a single-Hfe annuitv, owing to the feet that in many cases
infants were nominated, and in some instances the capital might have
been paid without any return being received. The redeeming feature
of the system, from the point of view of the tax-payer, was that, with
the death of the persons nominated, the annual chaige would tend to
become less and less, eventually ceasing. These wctc the original terms
of the subscription for the single-life annuities, but in 1695 more money
was raised, by the doing away with the single-life contingency on an

S. C. III. 1^

290 The South Sea Company [div. x. § 5 a

additional payment (which varied from 4J to 5 years' purchase) and the
conversion of the debt into a fixed annuity for 96 years from January
25th, 1695, of 14 per cent, on the original purchase price. The effect
of this rearrangement was to increase the capital paid without adding
to the interest, or in other words to lower the yield on the capital
subscribed to a little over 8 per cent, for 96 years. Another modification
of the same principle was effected in 1694 by the act which authorized
the establishing of the Bank of England^ in offering 14 per cent, on
a single life (as in the plan of 1693), 12 per cent, on two lives and
10 per cent, on three lives. On the whole, the certain term, even at
a lower rate of interest, was preferred to the larger but more doubtful
percentage during the continuance of one, two or three lives and loans
of the second type were comparatively rare. One was made in 1704,
but the majority of annuities were for 99 years, and loans on the latter
terms were raised annually from 1704 to 1712.

A second and more speculative method of floating loans was by
means of state-lotteries — a system still in vogue on the Continent. In
1694 a lottery, for which a million was subscribed, was held 2. The
total charge for this loan was 14 per cent, for sixteen years. The
minimum subscription was ,^^10, on which 10 per cent, was paid
annually, if that ticket did not draw a prize. There were 2500 prize
tickets, the first of which would secure an income of £1^000 a year
to the holder for the sixteen years the payments continued. In 1710
another lottery loan was made. On this occasion the total was a
million and a half. The prizes varied from £b to c£l,000 a year
for 32 years on £\0 tickets; and the tickets, that failed to obtain
prizes, received 7 per cent, for the same period. The capital raised
by this Lottery Loan of 1710 cost 9 per cent, for 32 years, so that
the charge for interest was low, but it is necessary to remember the
danger involved in the encouragement of extensive gambling by the
State.

A third system of raising money was by means of loans, made to
the State by the great companies. The Bank of England had paid
ri^l ,200,000, for which it received 8 per cent., and in 1698 the new East
India company found =£^2,000,000 at the same rate. Ten years later
both companies consented to the reduction of the interest they received
— to 6 per cent, in the case of the Bank and to 5 per cent, in that
of the East India company — and at that date the total advances from
both companies were ^^4,800,000. As compared with annuities, loans
from these companies possessed the advantage that the capital was
redeemable at an early date, and therefore the State was in a position

5 and 6 Will, and Mary, c. 20. ^ 5 ^in. and Mary, c. 7.

Div. X. § 5 a] Govermnent Loans 1694-1710 291

to take advantage of any improvement in its credit, by securing a
reduction of the interest on a renewal of the loan.

Diverse as were the methods for floating these classes of loans, the
interest-charge varied within comparatively narrow limits. Although
the single-life annuities originally were 14 per cents, the conversion
of these into 96-year annuities, on an additional payment, reduced the
interest paid, on the whole capital subscribed, to about 9 per cent.
The Tontine required 10 per cent, for seven years, and thenceforth
7 per cent, till the determination of the last life. The loans from the
Bank and East India company were at 8 per cent., redeemable at an
early date. As the interest on the latter was reduced to 6 per cent,
from 1708 in the case of the Bank and to 5 per cent, in that of the
East India company at the same time, and since on renewal of the
respective charters the rate was lowered from time to time subsequently,
it will be apparent that the loans made by the companies were raised
on the whole at the cheaper rate. But, on the other hand, allowance
must be made for the fact that the interest received by a company did
not constitute the whole payment made by the State for the capital
advanced, because the privileges conferred constituted an important
part of the transaction. Therefore the return received by a company
consisted of interest plus certain privileges, and so the rate of interest
alone, in such cases, would be relatively lower. So that to calculate the
actual cost of the capital borrowed from the Bank and the East India
company, it is necessary to form some estimate as to whether the
privileges of the charters were likely to be hurtful or not. For cases
might arise in which a saving of one or two per cent, interest would
be dearly bought by the establishment of a pernicious monopoly.
However, the loans of the Bank and English East India company
would not be subject to this objection, since the former had originally
no monopoly and the latter was incorporated to create competition with
the old East India company \ Therefore, in view of these facts, the
loans raised by these two companies were the cheapest, on the whole, of
those subscribed in the reign of William III.

So far, the funded debt has been dealt with rather from the con-
sideration of the generic character of the different loans than that of
the steps by which this capital was raised. The war, that terminated
in the Peace of Ryswick in 1697, was financed partly by all the
different methods mentioned, namely by the circulation of tallies, by
the floatation of loans on annuities, by a lottery and by borrowings
from the Bank and East India company. The subsequent four yeai-s
of peace from 1698 to 1701 enabled the government to, at least partly,

1 The general question as to the effects of monopolies for foreign trade is
discussed in Part i., Chapter xxii.

19—2

292 The South Sea Company [div. x. § 5 a

set its house in order, by l-educing the excessive circulation of tallies,
and by the end of 1701 nearly .^700,000 of the debt had been repaid.
However, the respite was too short to enable this operation to be
completed ; and the country was again at war before the repayment
of the tallies, engrafted into the capital of the Bank of England,
was ended \

The war, which began in 1702 and continued till 1713, proved not
only long but also costly. The financing of it was carried out in a
similar manner to that already noticed, namely by loans on annuities,
by lotteries and contributions from the Bank and the East India company.
The government had the advantage that there was now a financial
institution, i.e. the Bank of England, able to gather in capital and to
provide for temporary indebtedness, or to place permanent loans on
more advantageous terms than had been possible prior to 1694. On
the other hand, the fact that these two companies were now established
meant that neither would be in a position to provide as much money
for the government as they had found before 1700, when the loans from
both together amounted to .^3,200,000. Indeed, during the French
war from 1702 to 1713, the capital they lent, as forming part of the
permanent funded debt, was only <£^1 ,600,000, or exactly half the sum
provided during the earlier period. Therefore, the financial position
of the government after 1702 was a somewhat difficult one. The war
expenses were very large, and a considerable portion of the revenue had
been pledged for the service of the existing loans. At first, the pressure
of the war was not seriously felt by the tax-payer, and loans were raised
without any very great difficulty. In 1704 a loan on annuities for
lives was floated, which provided over a million and a half, and in the
following year this loan was converted into one for 99 years at 15 years'
purchase on the income, or in other words at a little less than 6f per
cent, interest. Other annuities for a similar term were issued annually
till 1711 at varying rates between 6| and Q\ per cent. By the end of
October 1704 the scarcity of capital began to be felt ; and, as already
shown, there was a run on the Bank of England ^ In 1705 and 1706
the situation was sufficiently serious to compel the Bank to pay a less
dividend than the interest it received on the government debt, and
in the whole of the latter year the stock was below par. The stringency
of the money-market in 1706 was accentuated by the issue of an annuity
loan for over two and three-quarter millions, and also a foreign loan for
a quarter of a million to Prince Eugene ^ Although during 1707, 1708,
1709, the money-market was easier, there were still very grave con-
siderations affecting the minds of the owners of capital. Renewed

* Vide supra, pp. 214-24. ^ p^j^ supra, p. 220.

^ Luttrell, Brief Relation, ut supra, vi. p. 9.

Biv. X. § 5 a] The National Credit 1702-10 293

Jacobite activity had become an important factor in the situation; and
the anticipation, that the success of James would mean the repudiation
of the existing debt, made it exceedingly difficult to raise money in
sufficient quantities. This cause, together with the uncertainty of the
succession to the Crown and the dismissal of the Whig ministry,
exerted a most depressing influence in 1710, and Bank stock again fell
below par.

By the end of the year 1710 the financial condition of the country
was very critical. Although its credit was perhaps better than from
1693 to 1697, permanent loans could not be effected to the amount
required ; and there was a very large floating indebtedness, which was
then estimated at about 6f millions ^ The Bank of England had
proved itself serviceable in negotiating Exchequer Bills, but the
remaining obligations of the government of this nature were only
saleable at a large discount. Army debentures, for instance, one of
the best of these securities, never reached par from 1704 to 1710, the
highest price being no more than 93 J, while the lowest was 72 2. Other
debts, that had no fixed fund allocated for the payment of interest,
sold at lower prices, and the State was unable either to pay the principal
or to guarantee interest. Add to this, that the war was not yet ended
and that the administration of Harley was not popular with the monied
men, and it will be seen that the problem the government had to face
in 1711 was one of exceeding difficulty.

The financial situation at that time might be illustrated by that of
a person, who has incurred large liabilities and who had secured the
capital he required by mortgaging his property. After pledging his
income, he still finds that he is committed to further disbursements and,
if these cannot be avoided, he examines his assets to discover whether
any remain upon which money can be raised^. Just in the same way, the
government at the end of 1710 and in 1711, having reached the limit of
taxation and having assigned the income from the customs and other
revenues, was searching for some security, as yet unpledged, which would
enable it to finance the unfunded debt. The two great companies could
not be induced to add to the loans they had already raised, and the
question suggested itself whether any grant of incorporation for a new
trading company could be proposed as a security. The years 1710 and
1711 had been fruitful in schemes for insurances ^ and it is possible that

1 Journals of the House of Commons , xvi. p. 493.

2 Vide infra, Division xii., Section 3.

3 A similar metaphor was used in 1720, when the financial administration from
1688 to 1719 was compared to the conduct of "an extravagant heir to a great
estate"— Considerations on the Present State of the Nation as to Publick Credit, Stocks,
the Landed and Trading Interests, London, 1720, p. 10.

* Vide infra, Division xi.. Sections 1 and 3.

294 The South Sea Company [div. x. § 5

the foundation of a chartered insurance company might have provide
a considerable sum for the exchequer by way of loan. In foreign tradi
the time was past for monopolies of the commerce with any Europeai
country. Exclusive grants were already in existence which convey<
the trade with Africa, India and certain parts of North America. Thei
remained only the Pacific Ocean, which had hitherto been exploited by
Spain. The marauding and buccaneering expeditions from the time of
Elizabeth had raised very high expectations of the commercial possi-
bilities and more particularly of the mineral wealth of South America
(which was described as "the inexhaustible fountain of treasure^"), and
now that Britain was at war with Spain an excuse was offered for the
legalising of privateering by the sanction of a company formed to trade
into this area.

Though the formation of a National Insurance office had been pro-
posed in 1711, from which it was calculated the State would benefit
to the extent of over <5^1,000,000 annually 2, it was eventually decided
that a company for the South Sea trade should be incorporated. The
next point to be settled was how the charter could be made the means
of freeing the State from its most pressing embarrassments. Two courses
in fact were open, either a company might be incorporated on the same
lines as the Bank and East India company, the share-capital of which
could be lent to the government. In this way, capital would be pro-
vided, but at the same time the floating debt, which was all the time
growing, would be still unprovided for. Another method of utilizing
the promise of a charter, as security, would be to adopt the procedure
of the Million bank^ and Sword Blade company*; namely, instead of
seeking a fresh loan, the government might incorporate the owners of
existing loans, and the grant of the trading privilege would be available
to induce such persons to accept a lower rate of interest than would
otherwise be possible. In short, the monopoly of the South Sea trade
was the bait that tempted people to consent to the funding of their
share of certain debts, on an insufficient guarantee of interest which they
would not otherwise have entertained.

Harley, having decided on this plan of financing the unfunded debt,
proposed to the House of Commons that it should be adopted on
March 10th, 1711, and on May 3rd the necessary resolutions were

^ A Letter to a Member of Parliament, on the Resolution of the House to settle a
Trade to the South Seas of America, 1711, in Somers' Tracts (1748), 11. p. 399.

2 A Proposal for raising great svms of money all ever Great Britain, for the use of
the Government, by George Osmond, 1711, reproduced in The Early Days of the Sun
Fire Office, by Edward Baumer, London (Sir Joseph Causton), 1910, pp. 14, 15.

3 Vide supra, Division x.. Section 4.

* Vide infra, Division xii.. Section 3»

Div. X. § 5 a] Unfunded Debts ''subscribed'' 1711 295

passed'. The immediate effect of the acceptance of the scheme was to
raise the quotation of Navy Bills (which were to be subscribed into the
capital of the new company) by 20 per cent.^ There was some delay in
the final incorporation of the company, owing to the stabbing of Harley
by the Marquis de Guiscard^, and at length a charter of incorporation
was signed on September 8th, the necessary act of Parliament having
been previously passed^ The act, 9 Anne, c. 21, provided that such of
the proprietors of the floating debts, who were willing to assent to the
scheme, should have the right of being incorporated in a company to be
formed to trade to the South Seas, receiving stock of that company
in exchange for their present securities. The debts, to be converted
amounted to ^9,471,325 ^ on which, should all be subscribed, interest
at 6 per cent, was payable, secured on the duties on wines, vinegar,
tobacco, East India goods, wrought silks and whale-fins. As these
revenues had been allocated to other purposes for some years to come,
until they were available the interest was to be made good by the
treasurer of the Navy. Like the East India company and the Bank,
the South Sea company was to receive a stated sum to defray its office
expenses, amounting to an additional .s£^8,000 a year. The act also
authorized the grant of a monopoly of trade on the east of South
America, from the river Orinoco to the south of Terra del Fuego, and
along the whole of the west coast. The company might also trade in
any place or places within three hundred leagues from the west coast.
The monopoly was expressly stated not to apply to any possessions of
the Dutch or Portuguese, which were to remain open to all English
traders. It was also provided that the Queen might direct in her
charter that a capital, amounting to one per cent, of the whole stock,
should be set apart and employed in fishing.

These ideas were embodied in the charter which incorporated ''Hlie
Governor and Company of the merchants of Great Britain, trading to
the South Seas and other parts of America, arid for the encouragement
of the Jlshing.'" The privileges granted were similar to those of other
important undertakings, incorporated in the reigns of William III. and
Anne. The direction of the affairs of the company was in the hands of
a governor, a sub-governor, a deputy -governor and 30 directors. The
qualification of the governor was X^5,000 in stock, and that of a director

1 Journals of the House of Commons, xvi. pp. 541, 626.

2 Swift, Works {Faulkiner's Edition), ix. p. 95.
2 Ibid. ; Boyer, Reign of Queen Anne, p. 493.

^ Court Books of the South Sea Company— British Museum Add. MS. 25,494 et
seq.. Court Boole i., f. 7.

^ Estimate of the Debt of her Majesty s Navy, 1711, in Somers' Tracts, ii. p. 87;
Some Reasons offered by the late Ministry in Defence of their Administration, 1715, p. 49.

296 The South Sea Company [div. x. § 5 a

d£^2,000. Members of the company, who were in arrear in paying any
call, might not transfer stock nor receive dividends, without the consent
of the directors ^ J^

The total debts subscribed, consisting of unprovided-for Army, ^
Navy, Ordnance, Victualling and Transport debt as well as wages due to
seamen, loans in anticipation of duties and subsidies to the Elector of
Hanover and Duke of Zell, amounted to c^9,l 77,967. 15*. 4tZ. By
1715 the interest for that year was unprovided for and by the act
1 George I. (Stat, 2) c. 21, this deficiency, as well as certain other sums,
amounting in all to .£^822,032. 4*. 8c?., was added to the existing capital,
making a total of c£^l 0,000,000. Thus, the company began its career
with a capital of over nine millions, which was soon afterwards increased
to ten millions. This was a huge sum for the time. It was considerably
larger than the combined stocks of the Bank, the East India and African
companies. Such a capitalization was in itself an element of danger.
The directors could borrow very large amounts on the security of the
government debt of ten millions, such borrowings constituting the
trading or working capital of the undertaking, as distinguished from its
share capital. For ninety years the original East India company had
managed to develope a trade on an average paid-up capital that certainly
did not exceed ^^400,000^ The South Sea company could find one of
ten or, possibly, twenty times as much. Even if it had been able to
prosecute the Pacific trade, it could not employ to advantage its total
borrowing powers in building up the industry which it was incorporated
to foster. Therefore, it had a very large surplus of credit, which the
directors might be tempted to employ in other directions. It is true
that they did not give way to this temptation till 1719, but it is
important to recognize that the catastrophe of 1720 was contained in
embryo in the very inception of the company.

Scarcely any one foresaw this danger. The Tories, after being dis-
appointed in the Land bank, and having suffered from the dominance of
the monied men in the Bank of England, had at length in the language
of the time "a fund of credit*" of their own, and there is scarcely any
limit to the praises which the scheme received. Swift, for instance,
writing as a partisan, stated that the restoration of the credit of the
Navy effected a saving of more than cent per cent in the Victualling
department, and that loans were placed with much greater facility after
the formation of this company ^

To grasp adequately the whole future position of the company's
finances, it is necessary to remember that stock was issued at par, as

^ Abstract of the Charter, in Court Book, i., f. 7.

2 Vide supra, ii. p. 177.

3 Swift, Works, ix. pp. 4, 96.

Div. X. § 5 a] The true Par of the Stock 1711 297

against the par value of the various debts incorporated. But these debts
liad been long at a great discount in the stock-market. Therefore, sup-
posing a person to purchase, say Navy Bills, to exchange into South Sea
stock, he would receive a larger amount of stock than the cash he paid
for the Bills or other security subscribed. Some measure of the depre-
ciation of these debts may be found in the fact that, when South Sea
stock was put on the market in October 1711, it was first quoted at
73 to 76, and during the last quarter of the year it varied from 71 J
to 82. Since the average of both sets of prices is about 75, this figure
may be taken as representing the value put on the obligations sub-
scribed, plus the advantages of incorporation with the monopoly of the
South Sea trade. Swift states that the proposal to establish the company
had brought about a rise of 20 per cent, in some of the securities
subscribed, but in all probability the appreciation in others may not
have been so great. If for purposes of forming a general estimate, the
appreciation all over the subscribed obligations be taken at 10 per
cent., this leaves 68^ as the price at which a portion of the unprovided-
for debt might have been purchased in 1710, which would give the
owner the right to have it converted into <^100 of South Sea stock.
Therefore the par value of the new stock was not £\00 in cash (as
might have been expected) but about ^^68 — a price which approximates
to that at which tallies and bank-notes could have been purchased in
1697 for subscription in Bank of England stock-. It follows, too, that as
soon as the State could make good the payment of the interest on the
ten millions and when the stock of the South Sea company was quoted
at 100, the stockholders would have a profit of about £^9> on an
average, or nearly 50 per cent. In other words, the par of South Sea
stock was not =£^100 but about 68 — that being the estimated original
cost of the securities exchanged for the company''s d^lOO of stock. It
therefore follows that South Sea stock at 100 was really at a premium of
nearly 50 per cent.

It was not until May 13th, 1715, that South Sea stock reached 100—
that is nearly four years after the formation of the company. During
this period, and indeed until 1720, the trading prospects of the under-
taking remained a possibility and little more. Owing to the state of
war existing between Britain and Spain until 1713, it was not thought
prudent to dispatch expeditions. On the signature of the Treaty of
Utrecht, it was found that the outlet for the activities of the company

1 Price of £100 unprovided-for debt, 1710 £68. Os. Od.

Appreciation on announcement of the formation of South

Sea company, 10% £6. IQs. Od,

Average price South Sea stock, 1711 £74. 16*. Orf.

2 Vide supi'a, p. 211.

298 The South Sea Company [div. x. § 5 a

in trade with Spanish possessions was not so favourable as had been
expected, and the Assiento contract, for the supply of negroes to the
planters in South America, gave very small scope for the employment of
capital. The renewal of war with Spain in 1718 again made the
voyages of the company very precarious; so that, during the first eight
years of the company's history, its trade was almost infinitesimal in
comparison with the great capital it could raise.

Until' 1719 the energies of the directors were confined to making
enquiries and occasionally equipping ships. It might have been ex-
pected that the capital resources of the company would have been
employed sooner in other directions ; but, on the fall of Harley's
ministry, the undertaking, he had founded, shared in his disgrace, and
the new government again favoured the Bank of England, so that the
South Sea company was in the somewhat ignominious position of having
large sources of credit at its disposal which it could not utilize. But,
while this was so, there was an undercurrent of the events of the period
that tended to place much business at the command of the company.
These tendencies were partly domestic, partly foreign — the former
arising out of the desire to reduce the interest on the national debts,
and the latter from the reflex influence of Law's financial system in
France ^

The general character of British loans has already been described.
The government had been forced to borrow at varying rates of interest
between GJ and over 8 per cent, from 1693 to 1711. Most of the loans,
which were issued as annuities, had still about 90 years to run, so that
the State had bound itself to pay a high rate of interest, when by 1719
capital could be obtained at 5 per cent., possibly in exceptionally
favourable circumstances as low as 4 per cent. Archibald Hutcheson,
one of the leading authorities on the finance of the period, had proposed
a scheme for the conversion of the debts in January 1714, and the state
of the debt was again considered in 1717^. In the latter year Walpole
introduced his scheme for the reduction of the redeemable debt by the
establishing of "a sinking fund^" In the promulgation of this pro-
posal, it was not made sufficiently clear how the money, raised by means
of the sinking fund, would be applied. There were numerous redeemable
debts, that is debts on which interest was payable until the State
returned the principal lent, which might be done at any time. Walpole's
intention was to pay off these loans, by means of the accumulations from
the sinking fund, at the same time offering holders the option of accepting

1 Some account of the mutual relations of the Mississippi and South Sea
companies will be found in Part i.. Chapter xx.

2 Computations relating to the Public Debts [1717], reprinted 1720, p. 7.

3 Memoirs of Sir Robert Walpole , by W. Coxe, London, 179B, i. p. 108.

Div. X. § 5 a] Schemes for Conversion of Debt 1714-19 299

a fixed interest at 4 per cent. — in other words part of the scheme
involved the conversion of the redeemable debt into new 4 per cents.,
dissentient stockholders being paid in cash from the surplus. What
Walpole did not make clear was the position of the owners of annuities,
which were the loans at most onerous rates. It was feared that the
position of these might be tampered with, and it was necessary for
Leechmere to assure the House that this portion of the debt "could not
be meddled with, without breaking in upon Parliamentary engagements
and violating the public faiths" Walpole's reply was scarcely as con-
vincing as it should have been. He is reported to have said that "there
had never been a design to use any compulsion with relation to the
annuities, that indeed an alternative might be offered to the proprietors
of them, but that it should be in their choice either to accept or refuse
it." This declaration was reassuring, as far £is it went, but it did not
succeed in removing the anxiety of the annuitants, and the resignation
of Walpole was received with satisfaction by the owners of the securities
affected. Still, although the conversion of the debt was delayed, the
proposal had been made, and the matter became the more urgent as
the government could effect some loans at 4 per cent, between 1717
and 1720.

Meanwhile the advocates of a conversion scheme had the example
before them of Law's Mississippi company in France, which towards the
end of 1719 had undertaken the conversion of the whole French national
debt. Law was a Scotsman, whose name is connected with certain
currency proposals submitted to the Scottish Parliament in 1705^^. He
was a man of good family, accomplished and of winning manners. Like
many other men of fashion, he had killed his opponent in a duel and
was forced to live abroad. For some years he was best known as a
daring gambler, and finally he arrived in France, during the regency of
the Duke of Orleans, and soon became one of the leading personages at
the Court. At this time the French finances were in an exceedingly
involved condition, owing partly to the strain of lengthy wars and the
corruption of the revenue officials. Law's first efforts, towards the
rearrangement of the currency of the country, took the form of the
founding of a national bank which was started in 1716^ But this was
merely a first step, which was apparently unconnected with the next
development, namely the amalgamation of the various foreign trading

1 Proceedings of the House of Commons , vi. p. 114. ^ p-j^ supra, p. 265.

3 John Law of Lauriston, in A Treatise on Money, by J. S. Nicholson, 1901, pp.
165-207; Recherches Historiques sur le Systeme de Law, par E. Levasseur, 1864,
pp. 44-56; Les Grandes Compagnies de Commerce, par Pierre Bonnassieux, 1892,
pp. 275-82; John Law of Lauriston, by A. W. VViston-Glynn, Edinburgli, 1907,
pp. 38-81.

300 The South Sea Company [diy. x. § 5 a

companies, which were consolidated into one great trust or combine,
which eventually controlled the trade to India, Africa, and French
America. In August 1719 this foreign trading company was authorized
to offer to convert the existing government obligations into its stock,
receiving 3 per cent, against 4 per cent, paid previously, thereby reducing
the charge for the service of the debt by 25 per cent. Thus the same
organization controlled the whole financial system of France and
dictated the policy for foreign trade, thereby including under one huge
monopoly much of the foreign commerce and most of the monetary
transactions of France. In fact, in modem terminology. Law's company
was the greatest trust the world has yet known, if not in capital, at
least in the all-embracing character of its monopoly. Now it sometimes
happens that a modern trust, which aims at a monopoly, gathers to
itself the elements that add to its size by offers of a high price, as
expressed in the nominal capital of the company. So it was in the cases
of Law's and of the South Sea companies. The money value of the
terms offered to holders of government loans, for purposes of conversion,
was very high, but at the same time the price of the stock was greatly
inflated. Therefore, at the market value of the stock, it would appear
more advantageous for the holder to take stock in the company, at the
price at which that stock was offered him, rather than be paid out
in cash. So that in France in 1719 as in England in 1720, holders of
government debts were not only willing but wildly anxious to take
stock of the company, authorized to make the conversion. This part of
the history of the Mississippi company will be found to be repeated in
that of the South Sea company, but there is one important difference
between the modes of conversion adopted in France and in England. Law
carried his consolidation to the extreme point of amalgamating his bank
with the trading companies. Having effected this object, his company, in
its banking capacity, made excessive issues of inconvertible paper, with
the result that the inflation, that had existed before the amalgamation,
became intensified. In England although, as will be shown, the South
Sea company affected the purchasing-power of money, it fortunately
happened that the Bank of England stood firmly for the system of
convertible paper-money, and the currency was not tampered with.
Therefore, the price of Mississippi stock was much higher than that of
South Sea stock, proportionately. The former was sold at twenty -four
times its par value, the latter at ten times, so that the issue of incon-
vertible paper in France made possible an inflation two and a half times
as great as that existing in England. Conversely when the reaction
came, the distress in France was much more serious than in England.
However, in 1719, and during the earlier part of 1720, the price of
Mississippi stock was rising rapidly. Fortunes were made with a facility

Div. X. § 5 a] The Conversion of 1719 301

hitherto unknown. Money was circulating freely. The charge of the
French debt was being reduced, and it seemed that a new era of national
prosperity, hitherto undreamt of, was dawning on France. The funda-
mental idea of the movement was the saving and ulterior advantages,
arising from the conversion of the national debt into the stock of a
trading company. The course of events in France strengthened the
hands of the advocates of a conversion scheme in England. The South
Sea company, by undertaking this operation, could use its large surplus
credit, and by February 10th, 1719, the House of Commons had resolved
to accept an offer made by the company for the conversion of the
Lottery Loan of 1710 into its stocks The method of raising money, by
means of State-lotteries, has already been described 2, and this particular
loan had been raised at 9 per cent, for 32 years on the million and a
half subscribed. In 1719 there remained 23f years of the term unex-
pired, and it was proposed by the company that 11 J years' purchase
should be given to the annuitants in South Sea stock. Should the
whole proprietary avail itself of this offer, stock to the amount of
^1,721,250^ would be required to effect the conversion*. South Sea
stock was selling a little over par in February 1719, so that the whole
body of annuitants would gain a profit of about a quarter of a million
on the million and a half originally paid or about 16 per cent., besides
converting an income of 9 per cent, on the average for 23| years into
a permanent one, subject to the advantages or disadvantages that might
arise from the company's trading operations. From the point of view
of the State, an annual charge of d^'l 35,000 for 23f years was reduced to
one of 5 per cent, on the capitalized annuities, which, should they all be
subscribed, would amount to ^£^77,625 subject to redemption. At the
same time, the company proposed to give stock for 1 \ years' annuity in
arrear at par, receiving 5 per cent, interest from the State. It offered
to lend the difference between the total annuities capitalized, together
with the arrears, and two and a half millions to the government, on
receiving interest on an increased capital of this amount, and it was
provided that, if the whole annuities should not be subscribed, the loan
from the company was to be reduced in proportion. Rather more than
two-thirds of the annuities was subscribed, so that instead of two and a
half millions being added to the existing ten millions of capital, the
total stock, issued to effect the conversion and that sold to provide

1 Journals of the Home of Commons, xix. p. 95.

2 Vide supra, pp. 289, 290.

^ I.e. £135,000x11^= £1,552,500

Arrears of interest, to be funded £168,750

Total £1,721,250

* History of the Public Bevenue, by James Postlethwayt, 1759, p. 313.

302 The South Sea Company [div. x. § 5 a

money to lend to the State as. agreed, amounted to £1,746,844. 8^. 10c?.
By this operation the capital of the company was increased to nearly
llf millions^

The steps taken to raise the sum of over half a million, to be lent to
the State, are of interest in view of the operations of the following year.
The company opened subscription-lists for the taking up of the stock
authorized, but not issued to annuitants (which at par would have
produced exactly the amount required). This subscription was post-
poned till July, when the stock was at 114. Therefore the company
made a profit of the premium on the half-million of stock issued, which
came to .£72,8001 The facility, with which this gain was made by the
company, suggested its policy in the larger transactions of 1720, which
consisted not only in issuing stock in exchange for government debt, but
in securing very considerable gains on that exchange, through taking
advantage of the premium on the stock. As long as Parliament
authorized the creation of South Sea stock to the par value of the debts
converted; and at the same time, owing to the stock being quoted above
par, the satisfaction of the holders of government debts would require
a smaller amount of the company's stock, the balance remaining would
constitute the profit on the transaction. From the point of view of the
government the conversion of 1719 was equally favourable. An irre-
deemable charge of .5^135,000 for 23f years was exchanged for a perpetual
but redeemable one of =£77,625. It might seem at first sight that this
involved a saving of over 50 per cent., but it must be remembered that
the charge up to 1719 had under 24 years to run, without repayment of
principal; whereas the new one was perpetual, subject to the right of
repaying the principal. This redeemable character of the new obligation
enabled the interest to be subsequently reduced, but it would scarcely
be fair to count on this, except as a contingent advantage of the scheme,
at the time the conversion was effected. A more accurate basis for the
calculation of the nett saving is found in taking the "present value " of
original and converted annuities, which would work out as follows with
compound interest at 5 per cent. :

£ 5. d.

The average interest charge of the Lottery Loan of 1710 was
9 per cent. Therefore taking an annuity of £9 for 24 years
its ^'^ present value" would be 9 X 13*8= 124 2 0

The maximum charge on the converted loan would be 4 per
cent. Therefore a perpetual annuity of £4 would have a
"present value" of 4x20 80 0 0

Leaving a minimum saving in terms of "present value" ... £44 2 0

1 For exact figures vide infra, Summary of Capital, p. 360.

2 Anderson, Annals of Commerce, iii. p. 317.

Div. X. § 5 a] Proposed Conversion of whole Debt 1719 303

It therefore appeared that, both from the points of view of the
State and the company, a conversion scheme on a larger scale would be
mutually advantageous. The State could effect a reduction of the
annual charge for as much of the debt as was converted, the company
had prospects of making considerable profits from the operation. The
company therefore proposed in November 1719 to convert the whole
government debt due on annuities — this being the portion known as the
irredeemable debt on which interest was highest — and the redeemable
debt which included, besides various other loans, those provided by the
Bank and the East India company \ The proposal at this stage was in
effect the conversion of the whole national debt by the South Sea company,
which would have involved the transference to that undertaking of the
privileges of the Bank and the monopoly of the East India trade. So far
in fact the scheme proceeded on parallel lines to that adopted in France;
but, while it was in its initial stages, certain modifications were intro-
duced which differentiated it from Law's operations. The Bank and
the East India company were strong enough to compel the South Sea
company to drop that part of the early form of the conversion scheme
that contemplated the paying off of their respective capitals. Therefore,
the proposal that was discussed, amongst a group of prominent financiers
and the Treasury officials, provided for the conversion into South Sea
stock of the whole redeemable and irredeemable debt, with the exception
of that due to the two great companies. This amounted to over thirty
millions.

It is not a little difficult to convey a clear impression of the intricate
operations involved, because the working out of the scheme had two
different histories. The one was open to men of intelligence, while the
other was profoundly secret till the end of 1720. The few writers who
have dealt in any detail with the finance of the South Sea company pass
backwards and forwards from the open to the secret history. This
mode of treatment must inevitably distort the perspective of the period.
One judges the great mass of investors in 1720 in the light of informa-
tion which was sedulously concealed from them, with the result that
they appear to have acted with great want of foresight, sometimes with
an utter absence of common sense. So far has this attitude of mind,
towards the finance of the South Sea company, been carried that it is
commonly spoken of as "a bubble," and the conduct of the stockholders
is often characterized as "a mania," "a frenzy" or as the result of
general madness. But it should be recognized that these, and other
similar expressions, depend upon an implied reference to some idea of a

1 Aislabie's speech in the House of Lords— Proceedings of the Home of Lords, ut
supra, III. p. 174; Mr Aislabie's Second Speech in the House of Lords on Thursday,
July 20, 1721, p. 9.

304 The South Sea Company [div. x. § 5

"social organism," which is a term valuable as a metaphor but not as an I
explanation of phenomena. To speak of a national madness (which, if
the nation is to continue, must be followed by a return to sanity) is
merely to state that people have acted for a time unreasonably, but
without giving any explanation of such action. Further, that a nation
should act for a time unreasonably (as it seems to us), and a short time
afterwards return to a normal condition shows that the faculty of
judgment was unimpaired. How then does it come about that appa-
rently numbers of people suffer simultaneously from an attack of forming
wrong conclusions, on matters in which they are vitally interested?
The answer appears to be that, in the spring and summer of 1720,
men formed their opinions on certain evidence, which was not the whole
evidence. On the contrary, information, that would have led to an
opposite conclusion, was concealed from the public. Therefore, it is
not impossible that the investor of 1720, so far from being subject to
"frenzy" simply decided his action, possibly too optimistically, but still
on the whole rightly, from the data before him. What makes his
conduct appear to be illogical is that we have many of the facts avail-
able, and do not recognize that the part concealed at the time was the
more important; and, had it been known, it would have caused the
public to act in precisely the opposite way to that in which it did.
Therefore in the following account, in order to show the train of causes
and events, not as they were, but as they appeared to the men who were
affected by them from day to day, the South Sea scheme will be dealt
with as it showed itself to the public, and subsequently the account of
it will be corrected in view of the secret history that underlay and
reversed the whole tendency of things as they appeared to be in 1720.

To take then first of all the conversion as it was worked out and as
it appeared (not as it really was); the early negotiations in November
1719 were not disclosed, and it was not until January 1720 that the
South Sea company came forward with a definite proposal for the con-
version of the debt. This scheme affected the whole debt, except that
due to the Bank and East India company. These debts were estimated
to amount to .£^30,981,712. Qs. Q\d. and consisted of redeemable and
irredeemable loans. The latter were of two kinds, first the long
annuities of 99 and 96 years which were to be capitalized at 20 years'
purchase, and secondly the short annuities to be capitalized at 14 years'
purchase. The authorized capital of the company was to be increased
by d£*100 stock for every £100 of debt subscribed on this basis; or in
other words, if the whole of the debt were exchanged, the capital would
be increased by nearly thirty-one millions. The company offered to J
consent to the reduction of the interest, payable to it by the State, from ^
5 per cent, to 4 per cent, after 1727. Therefore, supposing the whole

Div. X. § 5 a] Scheme to reduce Interest 1720 305

loans to have been exchanged into South Sea stock, there would have
been a saving in the annual interest of ^£'305,030. 14^. M. after 1727 ^
to which is to be added a reduction of 1 per cent, on the existing capital
of d^ll,746,844. 8,9. \0d. The company also proposed to pay the sum
of .^'3,000,000 to the State for the privilege of effecting this conversion.
This amount could have been used in discharging an equal amount of
the debt due to the company, and it was therefore equivalent to an
additional saving, at 4 per cent., of .£'120,000 annually. The following
statement will show in a tabular form the total proposed benefits of the
scheme.

Table showing saving to the State after 1727 bi/ the first offer of the
company for the privilege of effecting the conversion of the
National debts.

£ 8. d.

Interest on £30,981,712. 6*. 6|d (at various rates) ... 1,544,299 4 2

y> i, iy at 4% after 1727 ... 1,239,268 9 9

305,030 14 6
Add saving by reduction of interest on £11,746,844. 8s. 10c?.

by 1% after 1727 117,468 8 10

Annual saving on £3,000,000 at 4% 120,000 0 0

Total reduction in annual charge after 1727 £542,499 3 3

On January 22nd Aislabie proposed the adoption of this proposal in
the House of Commons. He endeavoured to show that, by the addition
of the sums saved annually to the sinking fund, the whole debt would
be extinguished in 25 years 2. An attempt was made to rush the pro-
posal through the House, but there was a strong party which supported
the claims of the Bank of England, representing that this institution
had rendered great and eminent services to the government in the most
difficult times and that, if any advantage was to be gained by the
conversion, this company deserved to be preferred before one "that had
never done anything for the nation'."" The Bank came forward with
an offer of five millions capital and an earlier reduction of interest to
4 per cent.^ On the 27th an opportunity was given the South Sea
company of amending its first offer, and the Bank, knowing that certain
prominent members of Parliament were disposed to favour its rival,
also handed in a second tender. Both of these were considered on
February 1st.

The Bank offered to make a capital payment, proportionate to the
debts converted, which on the whole amount was estimated to reach

1 Journals of the House of Commons, xix. p. 247.

2 Coxe, Walpole, ut supra, u. p. 182.

3 Proceedings of the House of Commons, ut supra, vi. p. 213.
* Anderson, Annals of Commerce, iii. p. 323,

s. 0. III. 20

306 The South Sea Company [div. x. § 5 a

d6*5,700,000 ^ This proposal differed from that of the South Sea
company, in so far as it provided in precise terms the ratio of the
exchange of stocks — for instance the holder of each long annuity was to
have the right of converting it into Bank stock at 17 years'* purchase,
and proportionate offers were made to the proprietors of the other
classes of debts. Bank stock in February was about 150, and therefore
this scheme was equivalent to an offer of 25 years' purchase in cash. It
had the great merit of determining the position of the owners of govern-
ment stocks; and, by accepting the scheme of the Bank, Parliament
would have done something towards safeguarding its creditors.

The second proposal of the South Sea company gave no information
as to the terms to be offered to the annuitants and owners of redeemable
debts, but it provided for an increased payment to the State, which was
to be calculated on the following basis. A payment of about 25 per
cent, of the nominal amount of the redeemable debt was to be made,
which was fixed at ^^4,156,306. 4*. lid. Then, on all the irredeemable
debts actually subscribed, the company would pay 4 J years' purchase:
and, upon those that were not subscribed, one year's purchase. Thus
the total amount, accruing to the State had all the loans been converted,
would have been nearly seven and three-quarter millions, or over one
hundred and fifty per cent, more than the first offer. As the scheme
actually was realized, the company was indebted to the State, by the
terms of this proposal, to the extent of .£^7,1 34,906. Os. 4f<i.^

In the temper of the Parliament early in 1720, there was no dispo-
sition to protect the owners of public securities, beyond the insisting
that there should be no compulsory conversion. For the rest, "in the
putting of the nation up to auction," the highest offer was accepted.
This was that of the South Sea company, which promised, besides a
reduction of interest in 1727, a minimum payment of nearly five millions,
which, on the complete success of the scheme, would be increased auto-
matically up to about seven and three-quarter millions ^

Between the acceptance of the company's proposals and the passing
of the act 6 George I. c. 4 which ratified them, the stock advanced veiy
greatly. During the month of February ^the price fluctuated between
129 and 184, and in March from 172 to 380. The explanation of this
rise of nearly 300 per cent, in two months is not far to seek. The

* A Collection of Calculations and Remarks relating to the South Sea Scheme and
Stock, by A. HutchesoDj p. 19.

2 Postlethwaite, History of the Public Revenue, p. 317.

3 In another form the position might be expressed as follows. The company
bound itself to pay over four millions on the whole redeemable debtj also one year's
purchase on all annuities. In addition it was to pay an additional three and a half]
years' purchase on such of the annuities as were actually converted.

Div. X. § 5 a] Issued and issuable Stock 1720 307

company had been authorized to convert the debt, the ratio of debt
it was to receive from the government was fixed, but the ratio of stock
it was to give in exchange for the existing loans was not fixed. There-
fore, as long as the present stock was quoted above par, the company
was in a position to offer less stock to owners of loans than it received
in the converted debt, and the difference between the capital so isstied
and the total capital issiuible would constitute its profit in surplus stock.
Further, as the market price advanced, this surplus stock would become
more valuable, and so, as investors realized the possibilities, the
quotation rose. Besides this speculative argument for the advance in
price, there was the advantage that would accrue to the company by
the organization of an enormous capital, which might eventually
amount to forty millions lent to the State, upon which large sums
might be borrowed. Not only were there alluring prospects from
the South Sea trade, but the mere fact of so large a working capital,
under prudent organization, would render the greatest enterprizes
possible \ Further, the close relations of the company and the govern-
ment must not be lost sight of; so that, in any venture which required
the assistance of the State, the most powerful support might be counted
on. In March and April no one could estimate exactly the value of
these various considerations, since the profits on financing the con-
version depended on the excess of issuable over issued stock, and the
amount of issued stock depended on the quantity of loans exchanged.
While the surplus of stock was altogether hypothetical, it was plain
there would be a very considerable profit in stock, and this became
more valuable as the price rose.

Thus, when the directors considered on what terms they would
offer to convert the loans in April, everything appeared favourable
for the success of the scheme. During the first fortnight of that
month the stock was very steady, being mostly a little over 300. It
was decided that the first subscription should be opened on the 14th,
and on till May 19th there was a time of great activity in the sale
of stock and the taking of subscriptions for the conversion of annuities.
Since the operations in April and May constitute a group by them-
selves, it will conduce to a more ready appreciation of an intricate
situation if these are treated separately.

1 An Examination and Explanation of the South-Sea Company's Scheme for Taking
in the Publick Debts: Shewing that it is not encouraging to those who shall become
Proprietors of the Engrafted Stock, to Join with the present Proprietors of the Company
at any advanced Price , 1720, p. 27.

20—2

308 The South Sea Company [div. x. § 5 b

B. The First Group of Issues of Capital and
Conversions, April — May, 1720.

The act authorizing the financial transactions of the company was
designed (as has been shown) for the conversion of the national debts.
It is therefore surprising that the directors, instead of first offering to
convert some portion of the debt, determined to make an issue of two
milhons stock at 300. In doing this, they were in reality selling stock
which was expected to accrue from the conversion, but which, until
that conversion had been effected, was not available, and which it was
possible might never be available. Supposing the premium on the
stock had disappeared, there would have been no surplus stock to issue,
and therefore the company would have been in the position of selling
something it had no right to sell. Thus the directors were committed,
at this early stage, to maintaining the price of the stock, until sufficient
debts had been converted to show a surplus of issuable capital above
the capital issued in exchange for various loans, equal to the amount
of two millions for which subscriptions had been invited. However,
the sanguine spirit of the times relieved the company of all responsi-
bility, for, from the middle of April till the autumn, the stock
remained over 300.

Accordingly, the directors having taken this risk, on April 14th '
two millions of the company's stock was offered for public subscription *
at 300, payable as to 20 per cent, on application, either in cash or the
bonds of the East India or Sword Blade companies^, and the remaining
80 per cent., in calls of 10 per cent, each at intervals of two months 2.
Soon afterwards a second issue of stock for cash was made, this time
of a million at 400. These two issues together would have eventually
realized 10 millions, which would have covered the amount due to the
government and certain other cash payments, but the directors decided
to deal with the amount received in a different manner, which discloses
a feature in their transactions that renders the study of the companyV|
finance very puzzling. Although two millions stock had been offered:
for subscription on April 14th there was allotted two millions am
a quarter of stock; and similarly, instead of a million at the second^
subscription, a million and a half, the explanation offered being that
"the subscription was taken in several books to prevent crowding,
notwithstanding which the crowd was so great that the clerks had not^
an opportunity of communicating with each others" Thus it turneclJ

^ For an account of the bank known as the '' Sword Blade Company," vide infra, ^
Division xii., Section 3.

2 Court Book, vi., f. 7-Brit, Mus. Add. MS. 25,497. ^ Ibid., f. 43.

Div. X. § 5 b] First Cash Subscriptions 1720 309

out that over 3f millions of stock had actually been allotted (instead
of three millions) which would realize 12J millions ^ Out of this
amount, it was decided to declare a dividend of 10 per cent., this being
the first time there had been any departure from the original payments
of 3 per cent, each half-year.

The next step consisted in the publication of the scheme for the
conversion of the annuities— no effort being made at this stage to deal
with the redeemable debt. Since the annuities were irredeemable, it
was to the company's interest to convert them as soon as possible,
whereas the redeemable debt could be paid off at any time. The
method of conversion was very involved. It consisted in offering stock
at 375 for a part of the capitalized value of the annuities, while the
remainder was paid in bonds and cash. The most interesting part of this
operation consisted in the method of capitalization adopted. For each
long annuity of £\00 subscribed, the government acknowledged itself
indebted to the company for twenty times the annual value, i.e. for
,^2,000. The company, to make the conversion more attractive, instead
of capitalizing long annuities at 20 years' purchase, offered 32 years'
purchase. Similarly, in the case of short annuities, it offered 17 years'
purchase in stock and bonds, receiving 14 years' purchase from the
government. The ratio of stock to bonds and cash was determined
largely by the effort to issue stock, as far as possible in multiples of
£9^5 stock, the remainder of the capitalized value being given in bonds
and cash. For instance the following table shows the working out of
the scheme in the case of a long annuity of £\0Q.

Conversion of £\00 long annuity into South Sea stocks

£100 annuity capitalized at 32 years' purchase = £3,200
£3,200 payable as to £2,625 in stock at 375=700 stock=£2,625
„ „ 575 in bonds and cash ... 575

£3,200 £3,200

The short annuities were divided into three classes, i.e. "the Prizes"
and "the Blanks" in the lottery loan of 1710 and the remaining short
annuities. In each case seventeen years' purchase was given as to the
part payable in stock at 375, the difference, as between the different
groups, consisting in the proportion of stock to cash.

This offer was an attractive one to the annuitants. The stock, they
were to receive at 375, was quoted at over 400 on the announcement
of the terms. Thus there appeared to be the possibility of an immediate

1 For convenience in this statement the figures are given only in millions, and
the full statistics are printed at the end of this section, p. 354.

2 For terms of conversion of short annuities vide infra, p. 355.

310 The South Sea Company [div. x. § 5 b

profit on making the exchange. Besides, instead of the annuitant
being an isolated owner of capital, he became a member in a great
financial organization, which already possessed the monopoly of the
South Sea trade with other advantages to follow. Then, should this
conversion be successful, there would be a large surplus of stock. The
rapid rise in price suggested the expectation that it might continue.
If so and if the surplus stock, now rendered available, were sold at a
higher price than 375, any advance on that quotation would be for
the benefit of stockholders, who had come into the company at 375
or less.

On the other hand, Archibald Hutcheson in his Computations had
drawn attention, with great detail, to the fact that the actual assets
of the company consisted of the debt due to it by the government.
Against nearly 11 J millions of this, stock had been issued at par.
Therefore the average amount of debt against each <^100 stock, when
issues were made above par, must always be less than the price of the
latest issue. Hutcheson's contention is on the whole accurate, but he
scarcely attaches sufficient weight to the contingent advantages that
would be receivable by the annuitant who converted.

To ascertain the position of a long annuitant, it is necessary to
estimate the original price of his investment. As has already been
shown, these loans were issued at prices between fifteen and sixteen
years' purchased At the beginning of 1715, when stocks were at high
prices, long annuities sold from 14 J to 15| years' purchase 2, so that it
may be assumed that, apart from the inflation of 1720, these annuities
were not as a rule saleable at more than 16 years' purchase. At that
price, the d^lOO annuity would be capitalized at <^1,600, or exactly half
the amount at which it was capitalized by the South Sea company. It
might be thought that, since the company doubled the capitalized value
of these annuities, by reducing the price of stock exchanged by one-half
{i.e. to 187^), an equivalent would be obtained in South Sea stock,
representing the original value of the annuity. But this statement of
the case overlooks the fact that a considerable payment was made in
bonds and cash. Taking the bonds as worth par, the position of the
annuitant stands as follows:

Equivalent of a long annuity of £\00 at 16 years* purchase
in South Sea stock.

£100 annuity cost at 16 years' purchase = £1,600

Paid by South Sea company in bonds and cash 576

Remainder of original purchase price payable in South Sea stock ... £1,025

^ Vide supra, pp. 290-2.

2 The Prices of the several Stocks, annuities and other pultlick securities, by John
Freke, Broker.

Div. X. §5b] First Conversion of Annuities 1720 311

For this sum of £\fi^6, there was given ^5^700 South Sea stock,
or in other words this annuitant held his South Sea stock, after con-
version, at 146 J.

It therefore follows that, as long as the stock was over 146^, the
annuitant did not lose money, calculating in terms of the prices of
annuities ruling up to 1715.

Making a similar estimate for the short annuities, the conversion of
the Prizes in the lottery loan of 1710 may be taken as an example.
The income in this case was payable only for 32 years from 1711,
of which upwards of 9 years had expired. Therefore, the original
capital subscribed would be no index to the value of this security in
1720. A better estimated price can be obtained from the fact that
in 1719 the loan was valued, for conversion purposes, at 11^ years'
purchase. A year later it would be worth slightly less, but for purposes
of calculation the value might be taken at that accepted in 1719. On
this basis the following results are obtained :

Equivalent of Prizes of £\00 a year in the lottery loan o/* 1710
at 11^ years' purchase, expressed in South Sea stopk.

£100 annuity valued in 1719 at 11^ years' purchase =£1,150
Paid by South Sea company in bonds and cash ... 200

Remainder payable in South Sea stock £950

For this sum of £950 there was given £400 South Sea
stocky so that this annuitant held the stock, received on
conversion, at 237^.

Thus, as long as the stock did not fall below 237^, the annuitant
would not have suffered. The discrepancy, in the cost of South Sea
stock in terms of the value of long and short annuities respectively
before 1720, is noteworthy — the former holding the new stock on this
basis at 146^ and the latter at 237^. The difference is accounted for
in part by the fact that the short annuitant received a high income
for a limited period with no return of his principal; whereas, after
converting into South Sea stock, he had a right to participate in the
income received by the company from the State, until the capital was
paid off.

One of the many difficulties in the finance of the South Sea company
arises when any effort is made to calculate the stock issued as a result
of this conversion. There was a second subscription of annuities in
August; and, since the government capitalized all long and all short
annuities at fixed rates respectively, it did not preserve the amounts
converted at the different subscriptions separately. From the point
of view of the Treasury, it made no difference whether a long annuity

I 5^

312 The South Sea Company [div. x. §

was subscribed in May or August, since in each case debt was credited —
to the company at 20 years' purchase ; but from the point of view oS
the issue of the company's stock, owing to the difference in the terms
of subscription, the amount of annuities converted at the two sub-
scriptions is of great importance. Therefore one must seek in the
figures, authorized by the company, for the details of the different
subscriptions, which have not been preserved in the government
accounts. Such figures were published in 1720; but, on analyzing
them, it appears that the company admitted a subscription of annuities
in excess of that recorded by the Treasury. Thus there are two sets
of figures — the one being those furnished by the company in 1720 and
the other those preserved by the government. Several causes may be
assigned for the discrepancy^; but, since the final statistics do not
give the requisite particulars, it is necessary to deal with those
furnished by the company, which turned out eventually to have been
subject to modification. Even if the corrected data had been avail-
able, the earlier ones would be more suitable for the present stage of
the enquiry, since they were those that the investor of 1720 had
before him.

Taking then, for the present, the figures issued in 1720, the position
of the company, after the taking of the first subscription, was as
follows. The original capital was nearly 11 J millions. The stock to
be issued in exchange for long and short annuities was about 3 J millions,
and 3| millions had been issued for cash. These sums added together
made the stock at the end of May over 18J millions. As against this
share capital, the company had increased the debt, due to it by the
State, by nearly 9| millions; which, in addition to the original debt
of llf millions, made a total debt of over 21 millions. To this is
to be added the cash receivable for the 3f millions stock, which should
have eventually brought in 12| millions, making total present assets of
33| millions, subject to the payment of the amount agreed upon to the
State and the bonds issued to holders of annuities for a portion of their
capital. Thus the company had an issued capital of 18 J millions,
against assets of 33| millions. Further, the debt due to the company
was also the amount of issuable capital. This was over 21 millions,
of which only 18 J millions was actually issued; therefore there was
a surplus issuable capital of 2J millions, which might have been taken
up at 400 and would thus have realized 10 millions. This would have
brought the assets subject to certain payments to about 44 millions,
against a share capital of 18^ millions. According to this estimate
the stock would have had actual assets against it of about .£^240 of the

1 Vide infra, p. 329.

Div. X. § 5 b] Assets and Liabilities, Map 1720 313

market price. Any excess above ^240 represented the value placed on
the profits to be derived from the conversions yet to be made, and the
collateral advantages of the organization of a great capital and from
the South Sea trade. There was a further consideration of a more
speculative nature which might have been adduced to justify the high
price of the stock. Up to 1719 all conversions had been effected on
the basis of the increase of capital and government debt pari pasm.
So before 1720 a capital of 11 j millions was secured on a like amount
of government debt : whereas in 1720 an increase of 6f millions in the
capital had been accompanied by an increase of 22^ millions in the
assets \ In other words, while the capital had been increased by 50 per
cent., the assets immediately available had been increased by 100 per
cent., and there was in addition a surplus of issuable capital. To
persons of a speculative temperament, the possibility of profits,
advancing in a geometrical ratio of this nature, offered most fasci-
nating prospects, and what kept the price high was the expectation
that further purchases would be made at more enhanced quotations.

To sum up the state of the company's finances on the announcement
of the terms of conversion, there were assets for 60 per cent, of the
market price, which was then 400, and the remaining 40 per cent, of
the price was the estimate placed on the goodwill of the company.
The ultimate value of this goodwill would depend on the success
attending the organization of the capital-resources controlled by the
company; and, as these included a monopoly, already granted, with
the prospects of others to be secured later, it may be admitted that,
although the amount payable for goodwill was high, it was not
excessive.

A similar conclusion may be reached by a slightly different line
of argument. A very little consideration will show that, since nearly
two-thirds of the capital had assets of the same value against it, which
assets had not appreciated, that to justify the price of 400 for the
whole stock, there should have been prospects of profits which would
make good the deficiency in the assets, as these were in May 1720.
Apart from speculative operations, such addition to the earning power
might arise from financing on a large scale, and the resulting increase
of income might, in time, provide a sufficient return on the whole
stock, even at the high price of 400. It may be added too that the
great need of commerce in the first quarter of the eighteenth century
was a sufficiency of capital, and so it is scarcely possible to estimate
adequately, under the different conditions of the present time, the many
promising outlets there were then for the remunerative employment of

1 Subject, however, to certain payments.

314 The South Sea Company [div. x.

capital. In fact capital, organized in one single unit, might be utilized
in many directions, where no single fraction of the same capital could
find its way, and therefore some premium on South Sea stock was
justified and maintainable. The amount of this premium would
depend on the extent of profits made from the use of the capital,
and circumstances might be imagined in which a higher premium than
300 per cent, would have been based on actual earnings. Thus it will
be seen that the investor, who in 1720 bought stock at 300 or
even 400, may have been unduly optimistic, but there was at least a
possibility that his confidence would be rewarded in the future. He
was in reality discounting the results of an organization which was
not yet in existence. The tragedy of the situation was that, for
carefully concealed reasons, such results could never be realized. This
brings us to the second aspect of the subject, namely the secret
history of the scheme, which first began to show itself at the end
of May.

C. The Secret History op the South Sea Scheme.

The inner working of the conversion of the national debt constitutes
one of the most remarkable and disgraceful chapters in British finance.
As far back as November 1719, negotiations had been begun secretly
between an inner group of South Sea directors and the Treasury, which
would not have borne investigation. The design of converting the
whole national debt into a single redeemable obligation to a trading
company at a lower rate of interest would depend for its success, to
a large extent, on what the company could make out of the transaction.
Following the example of Law in France, the leading South Sea
directors aimed at the monopoly of British foreign trade, outside Europe,
and a supreme position in finance, at home, by paying off* the debt due
to the Bank of England and the East India company. When this
scheme was mooted to Aislabie, Chancellor of the Exchequer, he, accord-
ing to his own account of the interview, proposed that the conversion
should be divided between the Bank and the South Sea company, where-
upon Sir John Blunt, a leading director, exclaimed — "No, sir, we will
never divide the child ^^ Eventually the funds of the Bank and the East
India company were excluded from the scheme.

This modification of the original design removed a part of the
favourable prospects, but there remained another great gain from the
point of view of the directors — namely the acceptance of their proposals,

1 Aislabie's speech before the House of Lords, in Proceedings of the House of
Lords, III. p. VJ^ ; Mr Aislabie s Second Speech on his Defence in the House of Lords,
July 20, 1721, p. 10.

Div. X. § 5c] £1,259,325 spent in Bribes 315

without any limitation as to the terms on which the company's stock
was to be offered to holders of the debt. This absence of restraint was
the great objection, made against the scheme, in the subsequent debates
in Parliament, and it is inconceivable that members of the ministry,
who had any experience of finance, could have failed to see the dangers
of giving the company a perfectly free hand. Yet in January 1720 the
ministry recommended the scheme of the company to the House of
Commons. The grounds of this support were shameful. While the
bill, authorizing the conversion was pending, a small committee of
directors was formed, consisting of Sir John Blunt, Edward Gibbon,
Robert Chester, Richard Houlditch and Robert Knight, the accountant,
who were authorized in general terms to facilitate the passing of the
measure. This committee disbursed secretly dE^l ,259,325 amongst
favourites of the King, members of the government and of the Houses
of Parliament^. This sum of over a million and a quarter was used for
bribes by a method previously adopted by the old East India company.
The committee of directors bargained for the support of a certain person at
a certain price, payable on the passing of the bill. The transaction was
passed through the company's books as an imaginary dealing in stock.
The secretary entered in a special book, which was not open to the
inspection of the directors, a certain amount of stock at about the market
price when the bribe was accepted; and, after the act had been passed, the
person, who received the bribe, was credited with a sale of the stock at
the advanced price and was paid the difference. Needless to say the
"friends'' of the company, whose support was purchased in this way,
had never paid for the stock nor had any transfer been made out to
them. During the two months that elapsed, while the bill was under
consideration, the operation was disguised under cover of a loan on the
stocks What led to the ultimate detection of these illicit practices
was the fact that the stock, alleged to have been bought and sold, had
no existence. Indeed, before the actual passing of the act, the company
owned only a very small amount of its own stock. It required about
.^574,500 of stock for these bogus sales, so that the company was in the
position of appearing to sell something that had no existence. Indeed,
except for book-keeping purposes, no sales were made, and the trans-
action resolved itself into the company paying the difference between the
price at which a purchase might have been made on a certain date and
that at which a sale might have been made on a later date.

The distribution of the million and a quarter of bribes is difficult to
trace. The committee of directors dealt only with prominent persons,

1 Repart of the Committee of Secrecy, in Journals of the House of Commons, xix.
pp. 425-61.

2 Ibid., XIX. p. 426.

316 The South Sea Company [div. x. § 5 o

each of whom guaranteed the votes of his own following. AislabieJ"
Chancellor of the Exchequer, Charles Stanhope, one of the Secretaries,
John Craggs, Postmaster, the Earl of Sunderland and others certainly
became credited with South Sea stock in December and January, and
none of them found any satisfactory proof that they had actually paid
for it. It is beyond doubt that many of those named had not given
"any valuable consideration" for the stock with which they were
credited, and from the heads of the conspiracy the proceeds flowed to
their supporters. Evidently the corruption of Parliament had been
effected in a systematic manner, for the bill was carried in the Commons
on April 2nd by 172 to 55, and in the Lords on April 7th by
83 to 17 ^

Another illicit proceeding, which was afterwards traced to some of
the directors in their private capacity, was the purchasing of options on
the midsummer dividend as early as January. Hitherto the half-yearly
distribution had been 3 per cent., but an immediate payment of 5s. for
the dividend on £\0() was offered, with the promise of a further 3 per
cent., should the option be exercised. It therefore follows that more
than two months before the passing of the bill, certain of the directors
had already determined to increase the dividend, and that they took
advantage of their knowledge of this intention to obtain for £^. 5s.
a payment of cs^lO in stock, which was saleable at prices varying from
.e'^O to J>1002.

These events in the secret history explain why the directors were
forced to take the risk of issuing stock for subscription before such stock
was legally issuable. For it was out of the proceeds of the first sub-
scription that the bribes, for the passing of the act, were paid. Thus
while, as has already been shown, the investor, as distinguished from
the speculator, who purchased stock in April, was discounting the future
organization of the company''s capital as the source for increasing its
earnings so as to justify a price between 300 and 400, the directors
were committed to a method of managing the undertaking that involved
several fraudulent operations. Indeed the increase in the amounts
allotted at the first two money subscriptions was suspicious. It will be
remembered that three millions of stock were offered to the public, but
three and three-quarter millions had been actually taken up. There
was no resolution authorizing this additional subscription, and it was
discovered in 1721 that, in at least one case, stock had been issued
to Aislabie at the second subscription eight days after the list was

^ Proceedings of the House of Commons, vi. p. 214 ; Proceedings of the House of
Lords, III. p. 126.

2 Proceedings of the House of Lords, in. p. 185.

Div. X. § 5 c] Fraudulent Operations 1720 317

supposed to have been closed, and when the market price showed an
advance of 40 per cent, on the amount paid up*.

In fairness to the person who bought stock up to the middle of April
1720 it should be noted that these facts in the inner history of the
management of the company were most carefully concealed. Extra-
ordinary precautions were taken to disguise the less reputable dealings
of the committee, concerned in the promotion of the bill. The irregu-
larities were not discussed at meetings of the whole court of directors,
and the papers that recorded them were not accessible to more than
three or four persons. It was only after the strongest pressure from
Parliament in 1721 that the facts, relating to the bribery of ministers,
were extracted, and even then much of the truth was successfully hidden.

By the beginning of May thoughtful people should have begun to
see that the directors had no intention of developing a legitimate
business and were devoting their energies, as well as the resources of
the company, towards the manipulation of the market. Previously the
price of the stock had been inflated by devices that could not be readily
detected, but now the court adopted a policy which was openly intended
to advance quotations. This new departure was by the making of loans
by the company on its own stock, and it constitutes the second stage in
the history of the finance of 1720.

D. Loans on Stock, April to June 1720.

At first sight it seems incredible that, while money was being paid
in on the first two money subscriptions, the company should have
declared a dividend payable, not in cash, but in stock. The truth of
the matter was that cash was required, not only to discharge the illicit
claims for the promotion of the act, but also to enable the directors to
make loans on the security of the scrip. As early as April 20th (when
the price of the stock was at 328 to 339), it was resolved to lend half a
million at the rate of =£^250 on ,^100 stock — no person to receive a loan
of more than ^£^5,000. Further loans were authorized on May 20th
and June 9th 2, and in addition money was lent on the partly paid
subscriptions, taken in April.

The effect of these loans was to bring about a rapid rise in quotations.
The increase in the resources available for making purchases added to
the demand; while, at the same time, it was necessary for the borrowers
to deposit with the company stock which had a larger market value
than the sums lent on it. Thus, while the demand was increased, the

1 Journals of the House of Commons, xix. p. 434.

2 Ibid., XIX. p. 435.

318 The South Sea Company [div. x. § 5

supply was artificially restricted. Not only so, but there was conside
able delay in the issue of marketable scrip against annuities subscribed;
so that the company was in a fair way to " corner '"* its own stock.
There had been vast transactions on margins ; and, although the general
tendency of the market was bullish, there were no doubt very large beaa|
sales, which, under the circumstances indicated, were difficult to cover.
It was probably for this reason that the directors were pressed to take
new subscriptions, and the same cause explains the delay in doing so. «

At the same time the company was not in a sufficiently strong
financial position to corner the stock completely. In May there had as
yet only been actually paid up on the 3j millions of stock issued in
April, a sum of under two and three-quarter millions, and so the directors
were forced to borrow to pay part of the bribes as well as to provide
funds to lend to stockholders. Thus the policy of supporting the
market could be pursued only within narrow limits; and there was
a temptation for the directors, after raising the stock to a high price, to
sell the pawned stock (which was transferred to the company) as near the
top of the market as possible, and then, on the resulting relapse, to
replace the stock, making a large profit by the operation, provided the
fall did not extend beyond the margin on the stock.

These general principles explain the quotations of the stock from
May till June. Had the directors allowed the market to be affected
solely by normal influences, it is probable that the price (which was
from 325 to 350 from April 15th to 20th) would have relapsed con-
siderably, and less onerous terms would have been obtainable from the
annuitants. Although half a million was authorized for lending and
nearly a million was actually lent in the month from April 21st to
May 19th, the price was barely steady ^ It fluctuated from 345 to 358
on April 22nd; and, even with the support of the loans, it relapsed
a little until May 10th, when, in view of the subscription of annuities to
be announced on the 20th, further support was given by the company
and the quotation was between 350 and 360 until the 19th. When
it is considered that the lending of nearly a million — which would lock
up close on c£*400,000 of stock — barely sufficed to prevent a bad break
in the price, it will be apparent that there was a very large overplus of
sales by the general public on balance. In fact the inner group of
directors, who managed the company's finance, were past masters in the
delicate operation of rigging the market. Almost simultaneously with
the announcement of the terms for conversion of the annuities, fresh
loans were authorized, and again large purchases of stock were made.
The situation, as viewed from the outside, was eminently satisfactory.

^ The movements in the price of the stock are shown day by day from May to
September in the diagram at the end of this volume.

Div. X. § 5 d] Rigging the MarJcet in the Stock 1720 319

For the month prior to the 18th of May the quotation had been almost
stationary, then, on the announcement of the terms of conversion, it
rose to 400 on the 21st and to 500 by the 28th, to 600 on the 31st,
reaching 700 the following day and closing at 770. On June 2nd
the stock was over 800, having doubled in price in a fortnight. This
enormous rise was attributable in part to the devices of the directors in
rigging the market, partly to false information they circulated as to the
future prospects, partly again to the influence of a spirit of wild specu-
lation which had now been aroused.

The effect of the loans, made on the eve of the publication of the
terms of subscription of the annuities, has already been explained;
and it may be added that, in artificially increasing the price of the stock,
the directors were able to offer that stock, in exchange for the debts
converted, at a much higher price than would otherwise have been
obtainable. On the success of the first group of conversions becoming
known, it was realized that there would be a large quantity of surplus
stock; and, as the price advanced, the value of such surplus on paper
became greater and greater. Also, in future conversions, higher prices
could be set on the stock given to owners of government debts, and
therefore the surplus stock from such future conversions would be
proportionately increased. For instance, if the same amount of annuities,
that were converted in May, had been subscribed early in June, the
South Sea stock offered in exchange could have been priced at 750 instead
of 375, and therefore only half the quantity of stock would have been
issued, and the surplus available would have been doubled. So far from
discouraging the growing speculative fever, the directors encouraged it
by every means in their power. Calculations had been published, pro-
fessing to prove that, the higher the price paid for the stock, the greater
would be the benefit accruing to the purchaser^ Rumours were circu-
lated of very great dividends to be paid in the future, 60 per cent, at
Christmas was talked of at one time 2. Exaggerated estimates of the
profits, derivable from the South Sea trade, were formed and some
unjustifiable expectations of what might be gained by the company
controlling the government.

The rise of over 400 in the price of the stock, during the fortnight
ending June 2nd, had been much too sudden to last, and on the 3rd
there was a relapse to 690— a fall of no less than 180 in twenty-four
hours. From the 4th to the 8th fluctuations were between 780 and
735, and it seemed as if there would be a fresh fall, but on the 9th the
directors again resolved to lend money on the security of stock. This

1 E.g. in the Flying Post, April 9th, reprinted in part by A. Hutcheson in his
Computations.

2 Coxe, Walpole, 11. p. 187.

320 The South Sea Company [div. x. § 5 d

support of the market was much needed, if the price was to be mainB
tained, for on the 14th the second payment of 10 per cent., on account
of the money subscriptions, was to be made; and many stockholders,
who had applied for stock, had to sell their old stock, so as to take up
the new. Such sales exercised a depressing influence in spite of the
funds provided by the company, and on the 14th the quotation was
again as low as 690. The next day the stock was quoted from 710 to
755, and it remained about 750 till the 22nd. From this time onwards,
prices were influenced by the second group of subscriptions, the first of
which was taken between June 16th and 22nd.

E. The Second Group of Subscriptions.

By. the middle of June the directors had lent about four and a half
millions, which, with the money payable for bribes and the bonds
due to the annuitants, made a total of about 8J millions to be found.
As against this, 30 per cent, of the sums, payable on the first two
money subscriptions, was now due. These issues should have realized
12f millions when fully paid, and thirty per cent, of that amount had
provided about 3f millions. Therefore, the eff*ect of the manipulation
of the market on the company's finances was to leave it indebted for
more than twice the cash it had as yet received from the members.
No fact could speak more strongly as to the strain on the resources of
the undertaking involved by the continued inflation of the price of the
stock by the directors. To carry on the same policy, it was necessary
that the basis of the company's credit should be strengthened, and
accordingly it was decided on June 15th to off'er five millions stock for
public subscription at 1,000, 10 per cent, being payable on application,
and the remainder in nine instalments of the same amount at intervals
of six months from July 2nd, 1721 \ Both the price and the sum total
were impossible. To expect that 50 millions should be raised in five
years, in addition to nine millions still to be called up on the earlier
subscriptions and with the surplus stock expected to accrue from the
approaching conversion of the redeemable debt still to be sold, was
utterly ridiculous. What makes this issue remarkable was the fact
that, on the day it was announced, the old stock was from 705 to 755.
It followed that persons, who subscribed, were in the position of paying
25 per cent, more for the privilege of applying, than the price at which
they could purchase the old fully paid stock. The inducement to pay
this excessive additional premium was that the calls on the new stock
were distributed over such a long period. Speculators took up as much

1 Journals of the House ofComnKms, xix. p. 433; Hutcheson, Computations , p. 94.

Div. X. § 5 e] Third Cash Subscription, June 1720 321

stock as they could find money to pay the first call of 10 per cent., and,
as the next instalment was not due for over a year, they trusted to
a rise in the price to enable them to sell within that time. The success
of this issue provided the directors with funds amounting to about
5 millions, and this sum was used to force up the price of the stock.
Three millions were lent out within a few days after the money had
been received; and, by the end of June, a total of nearly 4f millions
had been employed in supporting the market. At this date the total
loans from April amounted to the enormous sum of 11 J millions. This
was more than had been paid up on the three money subscriptions;
and as yet no real provision had been made for discharging the bonus,
payable to the State, on the debts converted.

The diversion of the funds, received from those who had paid their
application money for the third money subscription, produced an almost
immediate effect on prices. The stock remained about 750 until June 21st.
On the 22nd it fluctuated from 750 to 785, touching 1000 on the 23rd
and 1050 on the 24th\ The latter was the highest recorded quotation.
At this stage it is woi*th glancing back at the steps by which this
excessive inflation had been reached. On the passing of the act, the
stock was about 300. The April loan barely sufficed to prevent a serious
relapse in the price. The combined influences of the May loan, the
taking of stock off the market, the announcement of the 10 per cent,
stock dividend and the success of the first group of conversions raised
the quotation to 750. The third loan no more than enabled this figure
to be maintained. Thus an expenditure of 4J millions (or with that on
the subscription-receipts of 6J millions), with the aid of other causes,
raised the stock 450. The next loan of 4f millions only increased
quotations, and that temporarily, by 300, owing to the fact that the
issue of more stock had increased the supply; and, although the new
stock was only credited with 10 per cent, paid up at this date, it is
obvious that it had an important effect in widening the market.

Although the rise culminated on June 24th at 1050, the price was
kept fairly steady during the ensuing five weeks. In the remainder of
June the quotation was 1,000 on the 25th, the 27th and the 29th, falling
to 950 on the 30th. In July the stock varied from 990 to 940. In view
of the fact that a second subscription of annuities was to be taken on
August 4th, it is significant to find that the court of directors resolved
on July 27th to lend money from that date until Michaelmas "in such
manner as was judged best for the company's interest ^'^ but in spite

1 The Evening Post of June 24, 1720, and The Caledonian Mercury of June 26
mention a quotation of 1060, but the highest price given in the other papers or in
The Prices of the several Stocks, by John Freke, is 1050.

2 Court Book, viii., f. 33— Brit. Mus. Add. MS. 2o,-i99,

s. c. III. 21

322 The South Sea Company [div. x. § 5 e

of such proposed support the market was inert, and quotations fell
slightly. On July 30th the price had been 950 and by August 4th —
the day of the announcement of the terms for the second subscription of
annuities — it was from 870 to 890.

The conditions offered to the remaining annuitants were made to
appear as favourable as possible. Instead of 32 years' purchase for long
annuities, 36 years' purchase was now offered; while, as before, there
was one portion of the capitalized sum to be taken in bonds and cash
and the other and larger part in stock. For purposes of conversion this
stock was priced at 800 or about 10 per cent, below the current market
price. Since none of these annuities originally cost more than 16 years'
purchase, apparently no holder would be at a loss until South Sea stock
fell below 355^ i, but in reality the proposition was more favourable
than this since there was a payment in bonds and cash of c£*400 per c^^lOO
annuity. Taking the bonds at par, the position of the annuitant would
be as follows:

Equivalent of a long annuity of .^100 a^ 16 I/ears' purchase, as ex-
pressed in South Sea stock, a£cording to the proposals of August 4ith.

£100 annuity cost at 16 years' purchase £1^600

Paid by South Sea company in bonds and cash 400

Remainder of original purchase price payable in South Sea stock ... £1_,200
For this sum of £1^200 there was given £400 South Sea stock, or £300 of
the original pajmient was exchanged for £100 South Sea stock.

It follows from these figures, that in terms of the original purchase
price, an annuitant would not really lose until the stock he received
fell below 300. As compared with anyone, who had subscribed long
annuities in May, the latter held South Sea stock, in terms of original
purchase price, as low as 146^^ ; so that those who came in in August,
although they received ,£'400 stock as against ^6^700 stock exchanged for
the same amount of annuity in May, owing to the discrepancy in the
part paid in bonds and cash, held their stock at more than twice the
price at which they could have obtained it on the first conversion.

A similar estimate of the price of South Sea stock, exchanged for
short annuities, shows that it was held at 500 in terms of the value of
Prizes of the Lottery-loan of 1710, this comparing with 237| for the
same security, according to the terms announced in May.

Meanwhile in anticipation of the conversion of the redeemable debt
(which had not as yet been dealt with), people were lodging their scrip,

800 X 1 f?
1 I.e. -~~ — =355|. 2 Vide supra, p. 311.

Div. X. § 5e] Second Conversion of Annuities 1720 323

so as to make certain that they would be in good time. There were
over 16,000 holders of redeemables and the pressure on accommodation
at the Bank of England, where the bonds were received, was so great
that tables for the clerks had to be placed in the adjoining streets ^
At length, in the first week of August, the terms for conversion were
announced. For each £\00 of debt a nominal price of 105 was taken
as a basis of calculation, exchangeable into South Sea stock at 800.
These debts had originally been issued at par, so that all the holder
had to safeguard him, against a fall in the price of the stock he
received, was the premium of 5 per cent. In other words, he held
his new stock at 763 in terms of the original cost of his investment.
The inequality of the conditions, given the owners of redeemable debts
as compared with those offered the long annuitants, may be seen from
the fact that, in the exchange made in August, the latter held South
Sea stock at 300 and the former at 763, calculating from the original
cost of each investment.

On August 12th the final subscription for a million and a quarter
in cash was taken at 1,000. The amount announced had been a milhon,
but in this case, owing it was alleged to names being taken in several
books, the amount was increased by 25 per cent.^ The amount payable
on application for this fourth subscription, as well as the call due the
same day on the first, gave the directors funds to again manipulate
the market. The stock had fallen to 880 on August 5th, but by the
11th it had been raised to 900, which was maintained for the next
two days.

By this date the greater part of the conversions had been completed ;
and, unless the price of the stock in future issues had been set far above
1,000, the market quotations were unjustifiable. Further, it would have
been impossible to have floated the surplus stock at 1,000, much less
at an increased issue-price. This must have been apparent to anyone,
who considered the position calmly. A more serious element of danger
was the bad state of the company's finances. The directors had lent
more money than they had at their disposal, and they were obliged
to pledge the company's credit. Against the obligations thus incurred,
there were the calls still due on the four money subscriptions; but,
to ensure the payment of these calls, it was necessary that the state
of credit should have remained good. Even at the best, it is unlikely
that the capital required could have been found, and a collapse was
inevitable, owing to the many indirect practices of some of the re-
sponsible members of the company. So that, to state the situation
briefly, the company had staked its future on credit remaining good,

1 Anderson, Annals of Commerce, iii. p. 330; Coxe, Walpole, ii. p. 189.

2 Court Book, vi., f. 43— Brit. Mus. Add. MS. 25,497.

21—2

324 The South Sea Company [div. x. § 5 e

while at the same time some of the directors had undermined both tWP
credit of the company and, in a less degree, that of the nation. This
being so, the collapse of the market in South Sea stock was only a
matter of time and in any case it must have come soon.

F. The BEaiNNiNG of the Collapse, AuausT to
September.

The first shock to credit came from the South Sea company.

directors, in arousing a spirit of wild speculation, had let loose a force

which they were unable to control. The inflation of quotations had

tempted the unscrupulous promoter to launch all kinds of schemes, and

soon the shares of these ventures advanced to enormous premiums.

Everyone, who projected a company, thought in millions, but only

called up shillings on the shares. Thus, in addition to the outstanding

calls on South Sea stock, there were immense liabilities on the nominal

capital of other companies. As these matured in the future, the

difficulties of obtaining cash from the subscribers for the four issues

of South Sea stock for money would be intensified. The inevitable

consequence would have been a great increase in the rate of interest

owing to the scarcity of money, and this would have reduced the

inflation. The prominent directors of the South Sea company dreaded

such a contingency ; and, as they had paid so high a price for securing

the act of Parliament under which they professed to transact business,

it was only natural that they were exceedingly jealous of new schemes

which could claim no legal authorization. Therefore they decided to

endeavour to crush out the new and rival ventures, by putting the law

in force against them. The attitude of the State to trading companies

was somewhat curious. Legally, no one but the sovereign could create

a corporation ; and, if a company created by royal charter required any

exceptional privileges, after the beginning of the eighteenth century,

it had to obtain these from Parliament. This procedure was adopted

in the case of any important company which required a monopoly or

other rights; but, from the time of William III., it became customary

for individuals to unite as a company and carry on a business, without

any legal authorization. There were many associations of this kind

formed from 1692 to 1695, and no objection was made to their

operations. At the same time their existence was merely tolerated,

but it was in no sense legalized. Therefore the South Sea company

was within its rights in raising the question of title in the case of

unchartered companies in 1720, or of associations working under a

doubtful charter. Accordingly on August 18th a writ of scire Jacias

Div. X. § 5 f] Writ of Scire Facias issued 1720 325

was obtained against a number of the undertakings whose shares stood
at the highest premiums ^

While the South Sea company was within its rights in raising this
question, its action was most injudicious. It is a good legal maxim
that the plaintiff should come into court with clean hands, and it
might well have been argued that since the directors, who professed
themselves aggrieved by companies acting under obsolete charters,
employed as their banker an association that worked under a grant
for the making of hollow sword-blades, they had condoned the offence.
Indeed, when one considers the many indirect practices of the directors,
both in obtaining and applying their own act of 1720, it was the
height of effrontery to have raised the question. Probably in law,
as certainly in general ethics, it was less blameworthy to act without
authorization, than under Parliamentary sanction obtained by the
corruption of the ministry. In the second place, the object of the
directors was presumably to strengthen credit by the prevention of its
being over-extended. But they forgot that the inflation of the prices
of the securities they attacked had been brought about by purchases
of these very securities on a credit basis. Now, on the issue of the
writ, the prices of the shares affected fell very heavily, far beyond the /^

margins on which they were carried, and so it became necessary for
the speculators to sell other securities to meet their liabilities. It
followed then that the great fall in the quotations of the interdicted
companies was accompanied by a sympathetic relapse in the price of
South Sea stock. Before the issue of the writ the price had been close
on 900, and within a week {i.e. by August 25th) it had fallen to 810,
relapsing further to 755 on the 30th. Thus in less than a fortnight
the quotation had receded by 125. On the 31st it was known that
the court had decided to pay a dividend for the next twelve years
of 50 per cent, annually, and the stock rose to 815. This announce- 7
ment was the last effort of the court to maintain the current price,
and it was based on a reversion to the practice of early companies
of making divisions of capital to the stockholders. To have made
good this promise, it would have been necessary to divide the calls
receivable on the money subscriptions, together with the proceeds of
the surplus stock, selling the latter at close on 1,000. In fact the
directors, having exhausted their credit in supporting the market, now ^
endeavoured to effect the same object by pledging the capital resources
of the company for the payment of dividends. At first this new
departure strengthened the market. On September 1st the stock was
quoted ea; dividend from 780 to 770, and during the next week the

1 This question is dealt with from the point of view of the relation of companies
to the State and to each other in Part i., Chapter xxi.

326 The South Sea Company [div. x.

lO™

quotation gradually relapsed, touching 670 on the 8th. The court n
declared a dividend of 30 per cent, at Christmas, but the public began
to realize that the promise was illusory ; for, with a crumbling market,
the expected prices could not be secured for the surplus stock, and the
money subscriptions outstanding were unlikely to be paid\ Therefore,
so far from inducing purchases of stock, this dividend-announcement
was unfavourably received ; and, at the meeting on the 8th, the directors
had stifled objections and behaved in a high-handed manner^, so that on
the 9th the stock was as low as 575 — a fall of 300 in about three weeks,
and of no less than 44 per cent, from the highest point of the year
which had been recorded only seven weeks earlier.

Up to September 9th the fall had been very alarming, but during
the next ten days there was a remarkable collapse, which soon became
a panic. The reduction of quotations from 900 to 600 had been
occasioned by the check to the caiTying of the shares of lately formed
companies on credit, and partly by the fact that the South Sea directors
were no longer able to obtain funds to support the market. When
prices had been highest in the summer, private bankers had lent money
on the stock at 600 ; and, once the quotation reached this price, sales
of pawned stock were made. Such sales accentuated the depression ;
and, as the quotation fell, the limits of earlier loans were reached and
more stock was offered.

For a few days — from the 10th to the 15th — the stock was fairly
steady, considering the times, its fluctuations being between 670 and
555. On the 16th, in view of the meeting called for the 20th, the
price was from 550 to 510, and the next day from 480 to 450 — a fall
of 100 in forty-eight hours. On Monday, the 19th, 380 was touched.
The cause that produced a decline of 200 in four days was the infor-
mation that the court would consider whether the terms offered to the
second group of subscribers should be reduced. This meeting was held
on the 20th, and there was much recrimination. This was almost
unavoidable, for the interests of the members of the company were
sharply divided. Those who had received South Sea stock at 800 in
exchange for government securities, saw it selling at barely half that
price. The condition of persons, who had taken up the last two cash
subscriptions, was even worse. They had contracted to pay more for
the stock, and many of them had no means of raising capital to meet
the remaining calls. Therefore both classes clamoured for a revision
of the terms on which they had come into the company. On the other

1 Court Book, vi., f. 48 — Brit. Mus. Add. MS. 25,497; cf. An Argument proving
that the South Sea Company are able to make a Dividend o/*38 per cent, for twelve Years,
Adapted to the Meanest Capacities, 1720.

2 Historical Register, v. p. 366.

Div. X. § 5 f] Failure of the Sword Blade Co, 1720 327

hand, the original proprietors and the annuitants, who had converted
in May, were not as yet affected by the fall in price, beyond the loss
of a possible paper profit. They were unwilling that any alteration
should be made, which would reduce the amount of surplus stock.
After a long and acrimonious discussion, the meeting adjourned without
coming to any decision, but it was generally recognized that a reduction
in the terms of the second subscription must be made, for it was known
to the directors that their bankers — the Sword Blade company — were in
difficulties.

After this meeting the price fell on the 21st to 395-350. Then
there were rumours that Walpole had induced the Bank of England
to support the South Sea company, and on the 22nd the stock rose to
400, fluctuating between that price and 350 on the 23rd — the day the
agreement was signed by a joint committee of the two companies \
This agreement provided that a part of the debt due by the State to
the Bank should be subscribed into South Sea stock at 400, and it was
eventually ratified by the directors of the Bank 2. The Bank also
undertook to circulate the bonds of the South Sea company. It was
this part of the proposal that nearly wrecked it in the preliminary
discussions. The South Sea company had begun its career by trans-
acting a class of business, which had previously been in the hands
of the Bank, and there was considerable jealousy between the two
undertakings. Both had been antagonized in 1720, when they com-
peted for the privilege of converting the national debt, which was
eventually secured by the younger corporation. In the days of its
prosperity it remembered the rivalry of the Bank; and, when it had
large cash and credit transactions, it gave the business to the Sword
Blade company to the exclusion of the Bank of England. The latter,
now that the South Sea company had fallen on evil days, did not forget
this; and, when it was proposed that the circulation of the bonds
should be divided between the two banking companies. Sir Gilbert
Heathcote replied coarsely, but effectively, that "if the South Sea
company be wedded to the Bank, it ought not to be allowed to keep
a mistress ^^

Though the agreement was signed, events made its accomplishment
impossible. On September 24th the Sword Blade company was forced
to suspend payment, and there was a run on the Bank of England,
which precluded that institution from endangering its credit by any
active assistance to the South Sea company. The suspension of the
Sword Blade company took place on a Saturday, and on the following

1 Court Book, vi., f. 55— Brit. Mus. Add. MS. 25,497

2 /6irf., f. 56.

3 Vide supra, p. 240.

328 The South Sea Company [div. x. § 5 f]

Monday South Sea stock opened at 360 and fell to 300, touching 190
on the 28th.

The quotation of 190 on September 28th was the lowest points
reached for some time, and it was a sufficient index of the necessity
for re-adjusting the terms of the second subscription. The adjourned
meeting was held on the 29th ; and, although only ten days had elapsed
since the previous one, the price of the stock had fallen in that short
period by more than one-half^ Thus the stock now stood below the
level at which almost all of the holders of debts had converted, and the
necessity of ultimate re-adjustment of the finances had become urgent
through the failure of the Sword Blade company.

Gr. The Modification of the Terms of the Second
Group of Subscriptions in September.

At the meeting of the company on September 29th, Sir John]
Fellows, the sub-governor, made a speech which described the gravity
of the position. " No man can have an English heart and be at present
insensible of the calamities of his country. The credit of our nation,
that has been hitherto sacred and inviolable, that has stood the shock
of so many wars, the rage of different parties and all the efforts of
our common enemies is melting away^ while we fancy ourselves in the
possession of it. Every transfer-day brings the ruin of a hundred
families, and there is scarce a gentleman who hears me but has felt the
dismal effects of what has lately happened either in himself, his relations
or his friends. Not only private men, but our most substantial gold-
smiths and even whole companies stop payment. 'Tis almost become
unfashionable not to be a bankrupt. The reason of this is plain — our
specie begins to sink beneath the weight of our paper credit^.'''' No
doubt the miseries of the time in this description are not exaggerated,
but what Fellows omitted to state, and could scarcely be expected to
have confessed, was how far the credit of the nation had been strained
by the artifices of a group of the directors. Not only was Parliament
corrupted by them and the market manipulated, but the dishonesty,
that had characterized the beginning of the conversion and the inflation
of prices, was continued during the collapse. It will be remembered
that the company held large quantities of stock, pledged to it as
security, for loans ; and, on the beginning of the decline, sales were made
with a view of buying in again at lower quotations. Thus the directors
had much to do with accentuating the panic. The extent of the sales a

1 The recorded quotations were: Sept. 20th, 400, 420, 390; Sept. 28th, 260, 190.

2 Hiatorical Register, v. p. 380.

Div. X. § 5 a] Terms of Conversion modified 1720 329

of pawned stock by the company cannot be determined; but, when
the accounts were inspected by the House of Commons early in
1721, it was discovered that there was a deficiency in this account of
nearly half a million stock, showing that of the sales made that amount
had not been replaced \ Another fraudulent practice, sanctioned by \7
some of the directors, was allowing the withdrawal of the allotments
of stock, made to some favoured persons, in the third and fourth
money subscriptions after the price had fallen. The preferential treat-
ment, accorded to certain subscribers in the third subscription, was
specially glaring. Five millions stock were offered, applications were
received for eight millions, and the whole five millions were entered in
the books as allotted. Yiet it was found that subsequently the amount
of stock issued was reduced by dg^600,000, and by ^50,000 in the fourth
subscription'^. This course offers an explanation of a discrepancy as
between the figures published by the company in 1720 and those
compiled afterwards by the government. The total issuable stock,
according to the former account, was ^38,564,179. 13*. lOd ; and,
according to the latter, only <i£*37,802,203. 5*. 6^., so that the company
led the public to believe it had more than three-quarters of a million
issuable stock than turned out to be the case. Now, the issuable stock
depended on the amount of debt subscribed, and it is impossible that
an error of this magnitude could have been made. Since it was proved
that money subscriptions were cancelled, it is probable that the same
preference was accorded to subscribers of debts, and it is not unlikely
that the persons, who benefited, were those who received payments
before the passing of the act to aid the company in Parliament. In
the one case a payment was made by the directors under colour of
fictitious stock, in the other real stock was made fictitious.

In view of these facts and probabilities, it is obvious that the directors
(or some of them) had much to conceal, and the best course now open
to them was to stave off any investigation of their recent proceedings.
Apart altogether from the credit of the company, it was necessary, in
order to prevent the interference of the State, that the terms of the
subscriptions made in August should be reduced. Accordingly a
scheme was carried on September 29th by which, instead of the stock
for the second group of issues being exchanged at 800 and 1,000, it
was priced uniformly at 400 ^ The effect of this re-arrangement was

* Journals of the House of Commons, xix. p. 435.

2 Ibid., XIX. pp. 433, 434. The Committee of Secrecy charged the directors with
the converse irregularity in the case of the first two money subscriptions, i.e. of
increasing the amount of stock allotted, after the lists had been closed and on the
price having advanced.

3 There were certain minor modifications affecting the capitalization of the
ammities which are fully stated infra, pp. 354-8.

330 The South Sea Company [div. x. § 5 a

twofold. First, it did away with the great inequality between the
two groups of subscriptions. Henceforth all the subscribers in 1720
exchanged into South Sea stock between 300 and 400 — as is shown in
the following table :

Price at which South Sea stock was valued in exchange for
Government debts after September 9>9th, 1720.

First money subscription at 300

Second „ ,, 400

First subscription of annuities at 375

Third and fourth money subscriptions, originally at 1,000,

reduced to 400

Second subscription of annuities and subscription of redeem-
able debts, originally at 800, reduced to 400

There remained the difficulty that the original capital was issued at
par or less, so that the stock had assets against it which, on the average,
must remain less than the highest issue-price which was now 400, unless
such average could be raised by the proceeds of the issuable stock, as
yet unissued. But, in the second place, the effect of the re-adjustment
of terms on the quantity of issuable stock was very important. The
amount of stock, now required to satisfy the second group of subscribers,
was increased, and therefore the surplus of issuable stock would be
proportionately decreased.

Contemporary opinion on this arrangement was reflected by the
price of the stock. While the diminution of surplus stock was a dis-
advantageous influence, it was recognized that such stock of a discredited
company was of small value, as any attempt to sell it in a panic-stricken
market would have made the collapse a permanent one. Therefore, the
tendency of the reduction of the terms to aid in restoring credit was
regarded as a favourable point, and the price of the stock improved.
As a result of the meeting of September 29th the quotation had been
from 200 to 330 and (although the improvement to above 300 was
only temporary), it remained over 250 until October 10th. There
was a fall to 165 on the 14th, but this was partly recovered by the
17th, and from that date until November 12th the stock was over
200. From November 14th to the 17th the price relapsed, 140 being
quoted on the latter date. The next day a recovery began, which
continued till the 22nd, when 210 was recorded. From the 23rd until
December 14th, the stock continued to lose ground. It was at 196
to 180 on the former date, and it touched 124 on the latter — this being
the lowest price of the year. Although this quotation was only one-
eighth of that ruling on June 25th, as compared with the price at the
beginning of the year (which was 128^) it shows only a small fall, and

Div. X. § 5g] Hostility to the Directors 1720 331

it is worth mentioning that of the lowest annual prices since the
foundation of the company that of 1720 is the highest. With the
stock at 124 it is plain that only a small value was placed on the surplus
stock ; and, as this opinion was modified, the price improved, until 200
was reached on December 29th and 30th.

H. The Parliamentary Enquiry.

When Parliament met on December 8th, it was confronted by an
extraordinary situation. The scheme that it had sanctioned less than
a year before had not only miscarried, but had aroused the most violent
indignation throughout the country. The speculation had not been
confined to London but had penetrated to the chief towns. Edinburgh
and Dublin had been involved in the fever, country gentlemen, who
owned annuities or redeemables, had subscribed them, and were in
difficulties if they had speculated, or, if they held their stock, were
indignant at the possible profits they had lost. The breaking of credit
had affected industry everywhere, and it began to be felt that the South
Sea directors were to blame. Some of them had been exceedingly
arrogant at the time when they were courted for early information as
to the course of the market, and this, though a little thing compared
with the miseries of the nation, was very bitterly resented ^ During the
debate on the address in reply to the King's speech, much violent
language was used, the directors of the South Sea company being
spoken of as " miscreants,"' " the scum of the people," the " parricides
of their country," " plunderers of the nation," while the " pestilential
frenzy" was said "to have intoxicated and made drunk all ranks and
degrees of people with the wine of the fornication of this whore of
Babylon 2." Sir Joseph Jekyll said that, although some of the directors
were criminal, he thought, or at least hoped, some were innocent, but
there were those, who were not directors, who were equally culpable.
It was contended too, that while there appeared to be no existing law
to punish the erring directors. Parliament, as the legislative authority,
both could and should exert itself to make an example of those who
might be proved most guilty. On the other side, Craggs (who became
involved by the subsequent enquiry) and Walpole argued that the danger
would be increased by the commencing of "irritating enquiries," and

1 Proceedings of the House of Commons, vi. pp. 218-22; Coxe, Walpole, ii. p. 202.

2 Some Paragraphs of Mr Hutcheson's Treatises on the South Sea Subject, London,
1723, p. 16; The London Journal, No. 26, reprinted in The Political Letters in the
London Journal, 1721, pp. 51-6 ; A Brief Debate upon the Dissolving the late Parliament
and whether we ought 7iot to chuse the same Gentlemen Again, 1722, p. 15.

332 The South Sea Company [div. x. § 5 h

that the most urgent duty of the House was to seek a remedy for the
evil, and to wait till the public mind was calmer before investigating the
causes of it^.

It thus appeared at the opening of the session that there were two
parties. The one which was resolved to demand a strict account from
all persons, suspected of complicity in the irregularities of the execution
of the conversion, and the other, headed by Walpole and comprising _
persons involved in the scandal, which was determined at all costs to 9
stifle enquiry. Some idea of the extent to which members of both
Houses were interested in the scheme may be gathered from an unofficial
analysis of their avowed holdings in the company, all of which were
acquired in the spring and summer of 1720. There were 122 of the
Lords and no less than 462 of the Commons, who were known to have
been subscribers to the extent of about 3 millions of stock. This sum
was exclusive of such transactions as had been carried on in the names
of nominees. These persons were found to have borrowed .^2,600,000
from the company on the security of their stock. Further, it was
calculated, though this was necessarily only an estimate, that members
of Parliament had made profits on the holdings that were disclosed
of nearly 4| millions 2. Walpole indeed soon obtained the nickname of
"the screen,"" from his endeavours to shield members of the ministry,
who were implicated ^ The party for investigation included many
divergent elements — such as the Jacobites, who wanted to increase the
discontent in the country ; persons, who had suffered in the speculation
of the past year and were vindictive; and lastly those, who were
without any direct pecuniary interest and were anxious to maintain
the purity of parliamentary administration. Such a body, composed
of antagonistic groups, could act with little cohesion ; while its op-
ponents were smaller in numbers, but many of them, as will appear,
were united together by the need for concealing their guilty secrets.
A contemporary writer, who however was prejudiced against the
directors, sums up the situation by saying that "there certainly is
a majority in the House of Commons that are willing to do themselves
and the kingdom justice, but they act so little in concert together that
they are constantly baffled by a set of men whom guilt, money, &c.,
have linked in the closest bond^.""

On December 12th a motion was made ordering the directors to lay
a report of their proceedings before the House. This proposal took
the party, adverse to an enquiry, by surprise, and was characterized

^ Proceedings of the House of Commons, vi. pp. 221-5.

2 Index Rerum &; Vocabulorum for the use of Free-holders of Counties and Freemen
of Corporations, 1722, pp. i, ii, 18, 19.

3 Coxe, Walpole, ii. p. 216. * Ibid., ii. p. 216.

Div. X. § 5 h] a Parliamentary Enquiry ordered 1720 333

by Craggs as " preposterous \" Walpole urged that he was appre-
hensive, "if they proceeded in a warm, passionate way..., they might,
by running precipitately into odious enquiries, exasperate the distemper
to such a degree as to render all remedies ineffectual.'' It was soon
recognized that, in the temper of the House, it would be dangerous
to resist the motion, which was eventually canied without a division I
The directors were suspected of endeavouring to use inducements,
similar to those employed in February 1720, to escape compliance
with this order; and, in the meantime, the papers required were not
produced, until a more peremptory order was made on the 14th^ Such
documents, as had been presented, were considered on the 15th; and
an account of the loans, made by the company, was ordered. On the
19th it was proposed to appoint a select committee to enquire into
the execution of the act of 1720, whereupon Walpole contended that
such an investigation would consume much time, and that meanwhile
the opportunity of arresting the decay of credit would be lost. In
view of Walpole's proposals, which were introduced the same day, for
alleviating the existing distress, this motion was not pressed^.

When Parliament adjourned for a short recess at Christmas, very
little had been accomplished. So far Walpole and those for whom
he was acting had succeeded in evading any real investigation. Certain
papers had been ordered from the South Sea company, and Walpole
had proposed a scheme for reducing the capital by transferring a part
to the Bank and East India company. When business was resumed
on January 4th, 1721, the House was in a state of extreme irritation
before the consideration of the state of public credit was reached.
On the introduction of a " bill to prevent mutiny ,"*' Jekyll accused the
ministry of bringing forward this and other measures to block the
investigation of the affairs of the South Sea company, whereupon
Craggs said that opposition to this bill was uncalled for from "a
person who had received signal favours from the Crown."' Lord
Molesworth then said, "Is it come to this that every man, who has
a place, must do all the drudgery that is enjoined him .?" It was then
moved that leave should be granted to bring in a bill for securing the
persons and estates of the directors ; and, in the course of the debate,
it was alleged that there were some men in great stations, who were

1 Proceedings of the House of Commons, vi. p. 223.

2 Journals of the House of Commons, xix. p. 381.

3 On Dec. 13, 1720, Thomas Broderick (afterwards Chairman of the Committee
of Secrecy) writes to Lord Middleton : " How far ways and means will go to warding
the blow [of this order] I know not, but they will be used"— Coxe, Walpole, ii.
p. 204.

* Proceedings of the House of Commons, vi. p. 225.

334 The South Sea Company [div. x. § 5 h

no less guilty than the directors. Craggs evidently believed that this
insinuation was directed against him ; for, in the midst of a scene of
great excitement, he declared "he was ready to give satisfaction to
any man that should question him either in the House or out of it.
This was virtually a challenge to the whole body of members, and
Molesworth took it as such, saying that "he had been a member of
that House upwards of thirty years and never before knew any man
bold enough to challenge the whole House of Commons and all England
besides. For his part, though past sixty, he would answer whatever
Craggs had to say within the House, and he hoped there were young
members enough that would not be afraid to look him in the face
out of the House." In the midst of great confusion, Craggs partly
withdrew the expressions complained of, but the incident produced
an unfavourable impression ; and, so far from terrorizing the party for
enquiry, made them more determined to carry their point. Eventually
a secret Committee of thirteen was appointed, with full powers of
V investigating all matters, relating to the execution of the act authorizing
the conversion ^ This Committee was composed mainly, if not altogether,
of members who were avowedly hostile to the directors. It included
Thomas Broderick (the chairman), Archibald Hutcheson, the author
of the Computations^ Sir Joseph Jekyll, and Lord Molesworth 2. The
Committee pursued its investigations, sitting from nine in the forenoon
till eleven at night daily, Sundays excepted. At first little progress was
made. The persons implicated had a long time to prepare themselves,
and they had tampered with the books of the company. In some
documents " false and fictitious entries had been made, in others entries
with blanks, in others rasures with alterations and in others leaves had
been torn out."" It was found further that " some books had been
destroyed and others taken away or secreted^.'' The witnesses, who
were compelled to attend, answered unwillingly, if at all, and it
appeared that, during the first days of the enquiry, some of them met
and congratulated themselves on how little had been told"*. In spite
of these obstacles, the Committee soon became suspicious of the alleged
sale of stock, while the act was pending, and required an account of the
receipt of the proceeds for this four hundred thousand pounds of stock

1 Proceedings of the Horise of Commons , vi. pp. 227, 228.

2 Ihid., VI. p. 229.

3 The First Report of the Committee of Secrecy. The seven reports of this
committee were printed under the title of The Several Reports of the Committee of
Secrecy to the Honourable House of Commons, relating to the late South Sea Directors S^c. ,
London, 1721. The greater part is reproduced in Journals of the House of Commons,
XIX., to which, as being more accessible, reference will be made below, except in the
case of passages given more fully in the original reports.

* Journals of the House of Commons, xix. p. 428.

Div. X. § 5 h] Mutilation of Accounts 1720 335

and particulars of the payments made, when it was entered as re-sold
and more especially to whom these payments had been made. Robert
Knight, the cashier, was examined on January 21st; and, though he
denied having said (as deposed by another witness) that "if the bill
passed the stock would be well disposed of,'' he admitted that the
reason of entries being in blank was that " he did not think it proper
to enter the names of members of Parliament, who had any part of the
stock in the cash-book ^" He further explained that in a revised
account, which he had prepared for the Committee, the names of
members had not been stated as he was not certain of them. This
second account was made up from letters and papers in his possession,
and, when he was ordered to produce them, it happened that he was
summoned to the House of Lords, and his examination was adjourned
till the following Monday. Knight took the opportunity of absconding,
and he is reported to have said that "if he should disclose all he
knew, it would open such a scene as the world would be surprised at^''
Though Knight's flight was hurried, it had evidently been carefully
planned, and he must have had confederates, for he managed to avoid
extradition under colour of the statutes of " the Joyous Entry "" of the
States of Brabant.

On the escape of Knight, a new line of defence was developed by the
directors. Knight had stated that the distribution of the "stock" in
question had been the business of the sub-governor and the deputy-
governor ; but, in spite of this, it was now deposed by witness after
witness that Knight was the person who had been responsible. It
turned out that many entries and notes, relating to these transactions,
bore the cashier's signature and that these had come before the Com-
mittee. Therefore, since there was no denying Knight's handwriting,
his escape was connived at by the recipients of bribes, while the
directors endeavoured to make him the scape-goat. It is almost
needless to remark that a subordinate official could have no power to
deal in such large amounts, nor could he obtain access to the persons
who were suspected of receiving the so-called stock, without the
authority of more responsible persons.

The Committee was now hard pressed to obtain evidence. Even
from the mutilated accounts before them, it was unquestionable that
over a million and a quarter had been expended in bribes, under
colour of the payment of differences on stock. The items of the stock,
alleged to have been distributed, were admittedly compiled so as to
mislead, and the witnesses professed ignorance of the details, llie
problem then was how the Committee could trace any "stock" to a
specific source. Knight's evidence not being available, it became
1 Journals of the House of Commons, xix. p. 432. ^ /jf^.^ xix. p. 436.

336

The South Sea Company [div. x. § 5 h

necessary to accept statements of what other witnesses had heard from
him. On January 27th, for some reason unknown, Sir John Blunt gave
the Committee " the first material information "" it had received, but it
was Robert Surman, the late deputy-cashier, who provided the necessary
details. He had assisted Knight in preparing the account of the stock
disposed of which had been submitted to the Committee, and " he wrote
down several names which Knight read to him out of a book with a
green cover, wherein Knight had kept an account of the stock entered
in the cash-book of the company and also of subscriptions. He believed
that Knight did not give him all the true names, because sometimes
Knight turned over a leaf or two, without giving him a name (although
there were in those leaves names of persons with whom an account was
there entered). He remembered that in the same book, at the head of a
large account, wherein the debtor side came near to the bottom of the
page, he saw the name of John Aislabie Esquire, late Chancellor of the
Exchequer, but Knight turned over that leaf and did not give him that !
name to insert in the account.**' He also deposed to seeing the names ofl
James Craggs, the Postmaster-general, and of Charles Stanhope, Secretary ;
of the Treasury, "• all which names were left out of the account ; and,
after it was thus drawn out from the green book and from some letters !
which Knight delivered to Surman, the sums not coming right, Knight j
made several alterations in the names and prices, and inserted other
names and prices to frame the account in the manner in which it now!
appears ^" Subsequent examinations added the names of Lord Sunder-
land and a group of female favourites of George I. — the Duchess ofl
Kendal, her two nieces and the Countess of Platen. Besides, it sub-
sequently transpired that over thirty members of both houses of]
Parliament were subject to suspicion of having obtained stock without [
making payment '^.

Although these persons (or many of them) had been suspected o\
having received payment for their support of the company, it was only]
now that the Committee had obtained sworn testimony, justifying the
belief in their complicity. But as yet, the case was far from being]
complete. Surman's evidence depended on the accuracy of surreptitious
glances at the hastily turned leaves of a book which he was not intended]
to see. To obtain corroborative evidence, that would have been com-
pletely satisfying, would have protracted the enquiry indefinitely, if the!
whole field were to be covered. Therefore the Committee confined its]
investigations, in the first instance, to the cases of persons actually in
the ministry. The directors were very closely questioned, and Blunt
revealed that Knight had shown him a note for <^50,000 stock, signed

1 Journals of the House of Commons, xix. p. 427.

2 Second Report in Journals of the House of Commons , xix. p. 577.

Div. X. §5h] Knighfs ''Green Boole" 1720 337

by Sunderland, and that he had recognized the signature. Other
directors concurred in admitting that they heard from Knight of stock
to be given to Sunderland, as well as d^30,000 to James Craggs, senior,
the Postmaster-General. The order alleged to have been signed bv
Sunderland was not forthcoming, and there was no corroboration of the
charges. The position of Craggs was different. He escaped the charge
hanging over him by committing suicide, and it remained for the House
of Lords, in subsequent proceedings, to bring to light additional evidence
in his case. James Craggs — the Secretary of State — died of small-pox
at the time the report was issued, so that with this family, as with the
Stanhope's, the strain of the charges made had already resulted m
several deaths.

There remained the allegations against Charles Stanhope and Aislabie,
and in both cases the testimony of the directors was corroborated by
documentary evidence. As confirming the depositions that Stanhope
had written asking that ^10,000 or .£^12,000 stock should be taken in
for him, while the bill was pending ; it was proved, from the accounts of
the Bank of England, that between May and September, sums, amounting
to ^£^51,736. 13^., had been paid Stanhope from the account of the South
Sea company. Not only so, but there were some most remarkable trans-
actions in reference to 6^^50,000 of the stock under investigation. On
March 21st, 1720, it had been transferred to the Sword Blade banking
company — the chief partners in which were Sir George Caswall and
Jacob Sawbridge, the former being a member of Parliament and the
latter a director of the South Sea company. On June 11th this
d^50,000 stock was placed to the credit of "Charles Stanhope" in the
books of the Sword Blade company. On or about the same date the
stock was sold by the order of Sawbridge realizing ^375,000. This
same £5Qfi00 stock was identified as part of the fictitious stock entered
at 250 ; therefore, if the whole affair consisted in the paying of a
difference on stock which had never been actually purchased, the sum,
entered in the books of the Sword Blade company to be paid to the
person who was to receive the benefit of the transaction, would consist
of the excess of the actual price realized over the supposed purchase
price. In other words, it would be the difference between ^375,000
and ^125,000 and not, as it would have been had the stock been paid
for in the first instance, the whole purchase price. It was proved, by
entries in the books of the Bank, that bills had been drawn in favour of
Charles Stanhope for the difference, not for the total price realized, le.
for .£^250,000 instead of ^375,000, and that this sum was paid him m
December, 1720.

Therefore the evidence was fairly conclusive that Stanhope had
received the benefit from the advance in quotations, without havmg

S. 0. III.

338 The South Sea Company [div. x. § 5

paid for (or given security to pay for) the stock which was eventually
sold for his benefit, and that the Sword Blade company " covered " the
stock in the sense of concealing Stanhope'*s name until the sale had
been made. ^

The further actions of the partners in the Sword Blade bank con-H
firmed the doubtfulness of Stanhope's bona fides. His name disappeared
from the body of the ledgers, being altered into " Stangape," while the
original " Stanhope " was inadvertently retained in the index. Further
the bills for the payment of i^250,000 were admittedly destroyed; so
that strong, if clumsy efforts, were made to conceal the identity of the
person who received the money.

Lastly, there was also corroborative evidence as to the complicity o:
Aislabie. He was proved to have been involved in very large speculativi
transactions in South Sea stock, both before and after the passing of th
bill. It was discovered that Edmund Waller, his son-in-law, had an
account with the Sword Blade company, which amounted in all to ?
.£^794,451. 15*. m., and the balance of which was ^677,600. This wa«f
made up of dealings in stock, and it was admitted that a part was in
trust for Aislabie. He also had a large account with Hawes, one of the
South Sea directors, about which disclosures came later. A third set of
transactions was placed before the Committee by the broker employed.
It related to i?77,000 stock, which showed at the alleged purchase
prices the miserable profit of .^'SOS. 10*.^ Almost all this stock had
been entered during the time the bill was pending — 6^57,000 had bee;
purchased in the market, but d^20,000 was entered as " Hawes pe
Surman^." This description suggested the stock contained in th
"Green book," and was the subject of an exhaustive enquiry in the
second report of the Committee of Secrecy. Aislabie had asked for a
copy of the account of his brokers ; and, on seeing this entry, declared,
" with execrations not fit to be repeated, that he knew nothing of it,""*
and that his broker must make the same statement on oath before the
Committee^ Further, Surman deposed that, on April 11th, 1720,
bill for =£^27,878. 19*. Qd. was drawn in Aislabie's favour, but that th
entry of it in the cash book had since been erased. These facts — the'
dealing in the stock of a company by a Chancellor of the Exchequer
while that company was promoting a bill in Parliament, the supposed
ownership of stock by him which was not purchased on the market, the

1 This account shows that Aislabie sold his stock, as a rule, on the advance ii
the price. On one occasion he was in the position of a bear. These facts sug-ges
that the inner group of directors had not told him of the plans for forcing up tl
price.

2 First Report in Journals of the House of Commons, xix. pp. 429-40.

3 Ibid., XIX. p. 460.

le
a

Div. X. § 5 h] The tracing of the Fictitious Stock 339

payment of a large sum of money to him by that company immediately
after the passing of the bill—were all circumstances scarcely susceptible
of any possible innocent explanation. Curiously enough, what was
wanting in the evidence and reports of the Committee, Aislabie and
his friends inadvertently supplied in the House of Commons; but,
before passing on to the remaining scenes of the drama, it is worth
pointing out that the evidence against the persons implicated is
strengthened by the fact that the fictitious stock, which they were alleged
to have received, coincides with an entry of the distribution of that
stock. Aislabie admitted having, as he said, purchased, d^22,000 stock.
Stanhope was alleged to have received from ^6*1 0,000 to c£^l 2,000,
Sunderland ^^50,000, Craggs ^30,000. Now if the average of the
figures assigned to Stanhope be taken, i.e. £\\fiOO, a total of .£'113,000
stock is obtained, which exactly agrees with an entry in the account of
"stock sold to sundry" which records a "sale'' of ,^113,000 stock on
February 27th.

Statement showing distribution of £llSfiOO Jictitious stock.

Stock said by witnesses to have been Stock admitted as " sold to sundry " :

received by persons underwritten :

Sunderland £50,000

Craggs £30,000

Aislabie £22,000

Stanhope £10,000 or

£12,000, say £11,000

£113,000

Besides the effort to trace the fictitious stock, the fii-st report of the
Committee of Secrecy dealt with the various other irregularities, com-
mitted by the directors. Attention was drawn, not only to the loans
made on the security of stock, but also to the fact that differential y
treatment was granted to certain borrowers, both in the loans being
larger than the limit authorized by the resolutions and on a smaller
margin. It was also shown that the first two money subscriptions had
been arbitrarily augmented, and the last two contracted, in both cases
with a view to giving illicit profits to persons whose names (except in
one instance) were not disclosed.

This report was presented to the House on February 18th, 1721, ^
and the second part on the 25th. Reference was made to the trans-
actions in stock of Aislabie and Stanhope, both of whom protested their
innocence, and demanded that a day should be fixed for hearing them

1 This price was higher than that entered in the note given to Aislabie— it
represents the average of the fictitious prices on the notes given by Knight.

22—2

Feb. 27, £113,000 at £175 ^

340

The South Sea Company [div. x. § 5

in their own defence. Accordingly the 28th was fixed for the hearin|
of Stanhope.

The Committee on that date confined the issue to two charges, nameh
the taking in of d£^l 0,000 stock on his behalf, without any consideration,
while the bill was pending and the payment of the difference out of the
cash of the company, and secondly that ^50,000 stock had been taken
in by the Sword Blade company for him, and that the difference,
amounting to .9^250,000, had been received by him. An unexpecteclj
turn was given to the examination, when two of the partners in the
Sword Blade company alleged that the ^50,000 stock was received bj
that concern from the South Sea company wholly for their benefit\*
The tales told by the different partners were far from consistent, as foi
instance that this stock was to cover bear sales, or again that it wj
stock transferred after £10fiQ0 had been pawned to the South S(
company and d^l 05,000 lent thereon^. Obviously there was an absence
of any precise explanation as to the payment for the d£*50,000 stock;
and it may have been with a view to the suppression of this informatioi
that, as late as January 3rd, 1721, particulars of this loan had beei
omitted from the statement of loans laid before Parliaments It wj
generally believed by members that the Sword Blade company hi
held the stock in trust ; but, in view of the acceptance of responsibility
by the partners, this part of the charge fell to the ground. In referenc
to the allegation that Stanhope had accepted the difference on the
dfi'l 0,000 stock, no evidence was produced that he had paid for it, am
he met the charge by asserting that Knight had the keeping of a lar^
sum of his money, out of which payment had been made^ Evidently
such a defence was a forlorn hope, and it was recognized as such, foi
Stanhope's friends were endeavouring to secure votes in his favourj
partly by inducing waverers to support him out of respect for th(
memory of his relation the late Lord Stanhope, who had died tragically
in the House of Lords through the excitement of a debate on tht
national credit, and partly by persuading a number (it was said
many as forty) to abstain from voting S It was probably owing t(
these manoeuvres, rather than the strength of the defence, thai
Stanhope was acquitted by a majority of only three votes — th<
numbers being 180 to 177.

The evidence in relation to the £50fi00 stock pointed so strongl^
to the culpability either of Stanhope or of the partners in the Swore
Blade company that Stanhope's escape meant their condemnation ; anc

1 Proceedings of the House of Commons, vi. p. 235. ^ Coxe, Walpole, ii. p. 211,
3 Court Book, vi., f. 117; Brit. Mus. Add. MS. 25,497.
* Proceedings of the House of Commons, vi. p. 236.
^ Coxe, Walpole, ii. p. 209.

Div. X. § 5 h] Cases of Stanhope, Aislabie, Caswall 341

accordingly, when, on March 10th, the case of one of them. Sir George
Caswall, was heard, it was resolved that he had been guilty of " corrupt,
infamous and dangerous practices,""' and an order was made for his com-
mittal to the Tower\

Caswall was not the first to be condemned, for on March 8th similar
resolutions had been passed in the case of Aislabie. The charges against
him were similar to those Stanhope had had to answer. Perhaps Aislabie
may have suffered from the great popular indignation at the acquittal of
Stanhope, but, in any case, he and his friends had made an acquittal
impossible without causing the whole proceedings to be a travesty of
justice. The Committee, in its second report, had commented on the
huge amount of stock which Hawes had sworn he had dealt in on
Aislabie's account, amounting to =£^842,000. Each of the persons
concerned kept books, recording the transactions, which were signed
by both at each settlement. The House peremptorily demanded the
production of these accounts; and finally, under pressure, Aislabie
promised to produce them on the following day. When the time came
it was said by Hawes that Aislabie had forced him to deliver up his
copy, and thereupon the two books had been torn up and burnt ^
Needless to say, this revelation produced a most unfavourable im-
pression. There was also the sworn account of large transactions in
stock before the bill was passed. It is true that Aislabie endeavoured
to explain the item of £WfiOQ stock, entered as received from Surman,
by producing a receipt, signed by Knight for payment received by him
partly on December 10th and 19th and amounting to .£'27,480 for this
stock at alleged market prices, or with certain charges to ^27,810 in alP.
But there were two reasons why this receipt was subject to suspicion.
In the first place, it was proved at a later stage that a fraudulent
receipt had been given to CraggsS so that the mere production of
a discharged account cannot be accepted. What in fact appears to
have happened was that Aislabie did make a nominal transfer of the
money, or of money and security, and that subsequently it was returned
to him by Knight, whereupon (as stated in the second report) the entry in
the cash-book was erased. This interpretation of the episode is suggested
by the practical identity of the amounts of the erased entry and of the
receipted contract note— the latter being .^27,480 and the former
.£^27,378. 19*. Qd. There was another very discreditable episode in this
case. On May 8th, when the bill for forfeiting the estates of the
directors (in which part of Aislabie's property was to be included) was
before the House, General Ross, a member of the Committee of Secrecy,

1 Proceedings of the House of Commons, vi. p. 237.

2 Ihid., VI. p. 236; Coxe, Walpole, ii. p. 210.

3 Proceedings of the House of Lords, in. p. 160. * Ibid., m. p. 184.

342 The South Sea Company [div. x. § 5

stated that in the forenoon. Vernon (a connection of Aislabie'^s) had
asked to see him, and said that there was " a disposition in the House
to show favour to Aislabie, and that it was in General Ross' power to
do him a service, and for the same Aislabie would make him any
acknowledgment in any manner he thought fit^"" The House resolved
that this request contained evidence of a corrupt design, and Vernon
was expelled.

Aislabie next appealed to the Lords and made two very long
speeches in his defence. These traversed the same ground and con-
sisted partly in denials of the charges of the Committee, partly of
evasions of those charges. Aislabie had complained, with more reason
than perhaps he knew, of his disadvantage in being without the aid of
counsel, for he made several admissions that damaged his position, and
sometimes betrayed a callousness, in reference to financial uprightness,
that was offensive even to the lax conscience of the eighteenth century
politician. For instance there was no proof, but only a strong suspicion,
that any part of Waller's balance with the Sword Blade company belonged
to him, but on this occasion he stated that ^£^53,000 was his property.
Then, when he came to deal with the purchases and sales of stock before
the passing of the act, he seems to have thought that it was a sufficient
answer that the purchases were made with his own money and therefore
could not be a breach of trust ^ — as if there might not be more serious
frauds on the nation than speculating with public moneys. It is some-
what curious that the concluding sentences of the second speech contain
a half-punning allusion both to the corrupt offer made to General Ross
and to the advocacy of Walpole, a somewhat flippant conclusion to a
defence of any man's honour — " I heartily wish," he is reported to have
said, " that the worst of my enemies may in their day of trial, after such
a prosecution and such an enquiry, be able to make their innocence abide
the test as well as mine has done. I have made no base submissions, no
unworthy applications to any man, notwithstanding the vanity of one
of the Secret Committee. My innocence has been my only screen^ and
your Lordships' justice is my refuge." The Lords unanimously resolved

^ Proceedings of the House of Commons, vi. p. 245.

2 Proceedings of the Home of Lords, iii. p. 162 ; Mr Aislabie' s Second Speech on his
Defence in the House of Lords, July 20, 1721, p. 6.

^ There had been considerable misappropriation of public moneys by certain
officials. Thus Richard Hampden, Treasurer of the Navy, was charged with having
used over £30,000 of the funds in his custody for the purchase of South Sea stock ;
while it was admitted by Sir Harcourt Masters, a Receiver of the Land Tax for
Middlesex, that he had employed close on £40,000 belonging to the Crown in
speculation. The Several Reports of the Committee of Secrecy, 1721, pp. 68, 69.

^ Walpole was called "^the screen" of the persons accused.

Div. X. § 6 h] Cases of Sunderland and Craggs 343

to refuse Aislabie's petition, and to include his effects in the forfeiting
bill\

There remained the cases of Sunderland and Craggs. In that of the
former, there was no corroborative evidence ; and, on the accused giving
an explicit denial to the charge, the issue was narrowed down to whether
his word or that of Blunt should be accepted. The House of Commons,
which heard the witnesses on March 15th, decided, mainly on party
grounds, that Sunderland was innocent by a majority of 233 to 172 —
a verdict which may in part have been occasioned by the knowledge
that, so far from gaining, the accused had lost money during the
speculation of 1720 2.

Craggs, having perished by his own hand, the House of Commons
did not pursue the case against him, beyond resolving that the increase
in his estate during the speculative period should be confiscated ; and,
while his representatives were being heard in the House of Lords against
this resolution, a most damning piece of evidence came to light. As with
Aislabie, it was alleged, apparently in the most circumstantial manner,
that the purchase-money for stock had been paid, but, on Sawbridge
being pressed he, after much evasion, confessed that the money was
never paid, nor had there ever been any intention of paying it^

It has sometimes been said that the proceedings in Parliament were
vindictive, and that there was a disposition to condemn the accused on
mere suspicion ^ The completeness of the proofs adduced in the cases
of the four ministers implicated, obtained under great difficulties, owing
to the absence of Knight and the concealment of material books and
documents, is sufficient to show that, even in a time of panic, justice
was still administered. On the contrary, in this case punishment lagged
far behind ill-doing, for the convictions only accounted for o^52,000 of
the d^574,500 fictitious stock, so that, as a matter of fact, only one-
eleventh part of the bribes had been traced, and the recipients punished.

The final act of retribution fell upon the erring directors. On the
earlier disclosures of the Secret Committee, resolutions had been passed
condemning their malpractices, and such of them as were members of
Parliament had been expelled. As evidence accumulated, those who
were most culpable were committed to the Tower. While the House of
Commons was engaged in hearing the charges against the ministers
implicated, a separate investigation was being made by the House of

1 Proceedings of the House of Lords, in. p. 184 ; Mr Aislabie s Second Speech,
pp. 21, 22.

2 Proceedings of the House of Commons, vi. p. 237; Coxe, Walpole, ii. p. 190;
Mahon, Hist, of England, ii. p. 21.

3 Proceedings of the Hou^e of Lords, iii. p. 184.
* Cf. Gibbon, Miscellaneous Works, i. p. 16.

344

The South Sea Company [div. x. § 5 h

Lords. As a result of this , enquiry, evidence came to light showing
that some of the directors not only had bribed members of the ministry,
given preferential treatment to certain persons, and inflated the price of
the stock, but also that they had betrayed their fellow stockholders by
fraudulently maintaining high prices long enough to enable them to
sell their personal holdings of stock, either to the company or the
public ^ This characteristic, as well as others, differentiates the conduct
of the inner group of directors of the South Sea company from that of
the committees of the old East India company in 1694. The latter
availed themselves of bribery, under the pressure of events, and according
to the custom of the time. In spite of threats and penalties, the court
remained loyal to the stockholders. The most prominent South Sea
directors, on the contrary, betrayed their fellow stockholders; and, so
far from being forced into bribery, they occupy the role of tempters, not
of the tempted.

After the passing of the act, restraining the governors and directors
from leaving the country, there remained the fixing of the penalty to be
exacted from them. An inventory of their estates was obtained, from
which it appeared that some, who were already implicated in the most
doubtful transactions, had made large gains. For instance the estate
of Sir John Fellowes, the sub-governor, was ^243,000, and that of
Sir Theodore Janssen was the same amount. There were five other
estates over d^l 00,000 — those of Sir John Blunt, of Chester, of Gibbon,
of Read and of Surman, the deputy-cashier. Many of the remainder
had property exceeding <^50,000, but in ten cases the estates were under
c£'25,000, showing that a number of the directors had been excluded
from participation in the knowledge of the causes of the market fluctua-
tions that had been arranged secretly by their colleagues.

There was a party, both inside the House of Commons and through-
out the country, that clamoured for the most severe measures. Capital
punishment and imprisonment were demanded, but it was eventually
decided that the estates of the directors and prominent officials should
be confiscated, subject to certain allowances. The penalty, exacted
from Aislabie and Craggs, was the restoration of all property, obtained
in the one case from October 1st, 1718, and in the other from De-
cember 1st, 1719. The nett proceeds were to be handed over to the
company. Thus this bill, in the cases of Aislabie, the representatives
of Craggs and any of the directors who had small property before 1720
and who had largely increased it during that year, was one of restitution,
not of the exaction of a penalty. When the scale of allowances to be
granted was debated, a few members lowered the dignity of the House

1 Journals of the House of Lords, xxi. p. 484.

Div. X. § 5 h] Pmiishment of the Directors 1720-1 345

by taunting the unfortunate directors, some proposing allowances of
one shilling, or a few pounds. Others recalled instances of discourtesy
when the South Sea directors had been " as kings '" ; and, in the case of
Grigsby, the accountant (who having become suddenly well-to-do had
all the arrogance of the parvenu and had ordered his coachman to feed
his horses with gold), it was proposed that he should be allowed out of
his estate just as much gold as he could eat^ These were mere ebulli-
tions of personal feeling from individuals that must be expected, and
allowed for, after any great national calamity.

The general temper of the House, while not lenient, endeavoured
to make itself just by considering each individual case on its merits.
Including Aislabie and the representatives of Craggs, there were thirty-
five estates subject to confiscation. In three cases, where the persons
involved owned property valued altogether at under .^^1 5,000, practically
the whole amount was returned them, as an allowance. In seven estates
more than half the value was allowed. Most of these were under
.5^20,000, but one of them— that of Gore— was returned at ^38,936, the
amount returned him being ^£^20,000. In other cases where the estate
was large, and the director had not been involved, a very considerable
return was made. Thus Sir Theodore Janssen received back d^50,000
out of <£>243,244, and Col. Raymond .£'30,000 out of .£^64,373. Men,
who were wealthy and had some knowledge of the indirect proceedings
of their colleagues, were permitted to retain d^lO,000 each. More
drastic measures were taken with nine persons — Joy, Astell, Blunt,
Hawes, Holdich, Lambert, Sawbridge, directors, and Surman and
Grigsby, officials. The doings of all these had been recorded in the
reports of the Committee of Secrecy. Joy and Astell, as having been
implicated, received ^5,000 out of their estates'^. There was con-
siderable difference of opinion in the cases of Holdich and Lambert,
some being against any material allowance, others in favour of one of
considerable amount. Both, after a division, were allowed to retain
c£5,000. The same amount (out of .£121,321. \0s.) was granted
Surman, and Sawbridge was to receive the same out of <£^77,254.
There was a long debate on the allowance to be made to Blunt. His
estate was returned at £183,349 ; and, in view of the assistance he had
given to the Committee of Secrecy, it was proposed by some of the
members that he should be permitted to retain £10,000. This was
opposed by several speakers, who had suff*ered in some of Blunt's former
promotions. He had defied the House of Lords, refusing for a long
time to answer questions similar to those he had replied to previously
in the Commons. His over-bearing manner had probably as much to

^ Proceedings of the House of Commons, vi. pp. 247-52.

2 Joy's estate was £40,105. 2s. Od., Astell's estate was £27,750. 19*. 8|</.

346 The South Sea Company [div. x. § 5 h

do with the reduction of his allowance to ^£'1,000 as the large part he
undoubtedly played in the most discreditable episodes of the year 1720.
Of all the directors, Hawes, who had been concerned in transactions
with Aislabie, received the smallest allowance, on the ground that he
had encouraged the speculation and had been responsible for the ruin of
some clerks in the Navy Office, whom he had induced to speculate, it
was said, with public money. His estate was ^400,031, of which he
was only to retain the odd £%\^,

I. The Final Re-adjustment op the South Sea
Scheme by Parliament (1721).

Not only was it necessary that Parliament should fix the re-
sponsibility for the miscarriage of the conversion of the National
Debt, but it had an even more important duty to discharge in
retrieving the discredit of the South Sea company; for, since that
institution was the agent of the government, as long as it remained in
an embarrassed condition, the credit of the State would suffer. Under
the re-arrangement of terms in September 1720, all the holders of
debts, who converted in that year, held South Sea stock at a nominal
price of from 375 to 400. The market price at the end of the year
was between 140 and 200, so that the dissatisfaction of the holders,
who had converted, was very great. Many efforts were made to obtain
some revision of the terms, which the owners of securities had accepted,
and it was possible that the contracts made by the South Sea company
might have been annulled. Such an occasion was the touchstone of the
national honesty ; for, if the agreements made and accepted between the
State and the company had been broken, in the condition of the finances,
repudiation would have followed. The conduct of Parliament in this
crisis fully confirms the account given above of the general character of
even-handed justice meted to the directors, and it remained to extend
the same treatment to the stockholders who had come into the com-
pany, as far as was possible in the circumstances. The policy of
fulfilling strictly all the national agreements was admitted as the
guiding principle of the re-adjustment ; and it may be said that the
results of the panic were not all loss since the country was enabled,
in the midst of fraud and financial confusion, to maintain the national
integrity so that its engagements should be duly met. It was literally
true that the national honour, rooted in dishonour, stood.

1 The inventory of estates is printed in Proceedings of the House of Commons, vi.
p. 251.

Div. X. § 5 1] The Conversion modified 1721 347

Although Walpole had, for party reasons, endeavoured to secure the
acquittal of the implicated ministers, to him belongs the credit of pro- ^
posing and carrying through a scheme for restoring the credit of the
company, which was the best that could have been devised at the time.
This scheme was very simple. Walpole saw that the State could not
exact the money promised by the company. It was proposed therefore
that this should be remitted, and it would follow that the surplus stock,
being exempted from this liability, would be rendered available for the
relief of the subscribers. The speculative possibilities of such stock
had, as has been shown, been an element of danger and might become
such again, therefore it was determined that this stock, together with
the amount realized from the estates of the delinquent directors and /
ministers, should be divided amongst the stockholders who had sub-
scribed their government debts in 1720 according to certain ratios.
To prevent the danger that might arise from the aggregation of capital,
powers were given to the Bank and East India company to " engraft,"
into their respective capitals, nine millions each of that of the South
Sea company. As its issuable capital was ^38,000,000, a reduction of
.g^l8,000,006 would have brought it to ^20,000,000 and would have
removed the great disparity between the nominal capitals of the three
companies. This proposal was permissive, not compulsory, and the
East India company did not purchase any South Sea stock and the
Bank only ^4,000,000. In addition, .£^2,000,000 stock was cancelled
(but afterwards re-created), so that in 1722 the capital stood at nearly
.^32,000,000.

It was far from easy to pass these proposals, which were very warmly
debated on December 19th, 1720, and were carried in principle, apart
from details, by 259 votes to 117 ^ On the second reading of the bill a
violent and angry mob of persons, who had converted their annuities
and redeemables into South Sea stock, invaded the lobbies of the House.
It required the reading of the " Riot Act " before they could be induced
to disperse, and many were expelled from the precincts exclaiming —
" You first pick our pockets and then send us to gaol for complaining^."

The act, embodying this re-arrangement of the scheme, provided ^
that the surplus stock should be divided in the following proportions :

On each £100 Long Annuity, an addition to the South

Sea stock received in exchange of

On each £90 Short Annuity, an addition to the South

Sea .stock received in exchange of
On Annuities of £100 in the Lottery 1710, similarly ...
On Annuities of £98— Blanks Lottery 1710, similarly
On each £100 of capital in the redeemable debts

exchanged ... ... 33 6 8 „

* Proceedings of the House of Commons, vi. p. 226. ^ Coxe, Walpole, i. p. 155.

£ s.
203 6

8 stock

73 9

65 16

126 14

4 „
8 ,.
8 „

ill

348 The South Sea Company [div. x. §

J. The Incidence of the Losses remaining to be borne

AFTER THE KE-ADJUSTMENT OF 1721.

The knowledge of the exact additions to each proprietor's holding
enables a calculation to be made as to how he was ultimately affected!
by the re-adjustment. The two classes of debts, held in largest quantities,
were the long annuities and the redeeraables. There was only one sub-
scription of the latter, but there had been two of the former. Therefore,
holders of a long annuity of ^100, who had subscribed it at the first
and second subscriptions respectively and who had not sold the stock
received in exchange, would be affected in the manner shown in the
following tables, in terms of the original purchase price.

The effect of the South Sea conversion on a Long Annuity of c^'lOO
subscribed, which was originally acquired at \Q years'' purchase.

A. The effect as to Capital.

£100 long annuity, at 16 years' pur-
chase, cost ...

The annuitant on converting received
in cash

Balance of original cost payable in

South Sea stock ...
Which, at the rates of exchange, yielded

stock

Add 10 % Midsummer dividend 1720,

paid in stock

Add stock distributed, out of the

surplus stock, on the re-adjustment

ofl721

Total stock received in exchange for
original purchase prices of £1,025
and £1,200 respectively

Equivalent to a purchase of South Sea
stock at

Dividend on cash payment at 5 °/„

„ stock at 5 °/„ (subject to

reduction to 4 7o)

Total income annually 1721-7

Original income (terminable on expira-
tion of annuity) ...

Loss of income (subject to further re-
ductions) 22 11 8 25 16 8

Subscript

ion I.

Sul

Cash
£

)scription II.

Cash
£

Stock

£ 8. d.

Stock
£ 8. d.

1,600

575

400

1,025

1,200

700

0 0

800 0 0

0 0

80 0 0

203
973

6 8
6 8

203 6 8

1,083 6 8

105

6 2

110 15 5

ct a^ to Income.

Capital
£

Income
£ s. d.

Capital
£

Income
£ 8. d.

575

15 0

400

20 0 0

973|

13 4

1,083]^

54 3 4

8 4

74 3 4

100

0 0

100 0 0

Div. X. § 5 j] Final Position of Stockholders 349

The effect of the South Sea conversion on d£*l,000 capital of the
redeemable debts subscribed^ originally issued at par.

The effect as to Capital.

£ s. d.

Original issue-price £1^000

Exchanged for South Sea stock, after the re-adjustment of

September 1720 262 10 0

Add 10 7o stock dividend 26 o 0

Add stock distributed out of the surplus stock 1721 ... 333 6 8

Total stock received in exchange 622 1 8

Thus South Sea stock was held, in terms of issue price, at 160|.

B. The effect as to Income.

£ s. d.

At4V
£ s. d.

50 0 0

40 0 0

31 2 0

Original dividend on £1,000 capital

Dividend on £622 South Sea stock, received in exchange

Annual loss of income 18 18 0 8 18 0

Comparison of the final position of the Long Annuitants
and Subscribers of Redeemables.

Prices at which

South Sea stock

vas held in terms

Loss of income on

of original

South Sea stock,

purchase price

dividend of 5 %

105i

22r/o

llOf

25|7o

160|

37|7o

160|

22i7o

Long annuitant, subscription I.
,, ,, „ 11.

Holder of redeemables at 57o

)} )i J} ^ lo

It will be seen from the foregoing figures that the position of the
long annuitant, as to capital-value, in terms of the original cost of
the investment, was not unfavourable. Those who had subscribed in
May 1720 held their South Sea stock as low as 105|, and those, who
had exchanged in August, at llOf , both in terms of the highest price
of issue. It is to be remembered that, with the improvement in credit
from 1717 to 1719, the price of annuities was higher, and the purchaser
of that period would hold his South Sea stock at a proportionately
higher price. Still it is noteworthy, in spite of the views as to the great
losses occasioned by the speculative era and of the high prices at which
the stock was exchanged, that in terms of capital-value, on the basis of
an original purchase price at 16 years, these proprietors held their stock

1 Some of these loans were borrowed at 6°l^, some at 47o-

350 The South Sea Company [div. x. § 5

at a figure which left them a large margin of safety in comparison wi
the lowest price of the year 1720.

It was rather from the diminution of income that the long annuitant
suffered. Most of these securities were held for marriage-portions and
jointures^, and therefore the beneficiaries constituted just that class ■
which feels any change of the kind most severely. The gain that
accrued to them from converting, namely the substitution of a per-
manent source of income for one that was of a wasting nature, was not
recognized as a sufficient compensation, for any of the long annuities
would have out-lasted the life of a woman married by 1720. It is true
that the percentage, represented as reduction of income, might have
been made good by the trading profits of the company, but it was
undesirable that settled incomes should be made subject to trading-
risks. On the other hand, the eventual reduction of income would
tend to become greater, since the debt due to the company was re-
deemable ; and, as a matter of fact, the interest was subject to
reduction from 5 per cent, to 4 per cent, and was later lowered to

3 per cent. Therefore, as far as could be seen in 1721, the most the
company could be expected to do would be to maintain a 5 per cent,
dividend out of its trading profits ; and, on this basis, the figures given
for loss of income would not have been exceeded.

The real hardship fell upon the owners of redeemable debts, who
converted. They held their stock at 50 per cent, higher than the long
annuitants and they had to face a greater loss of income. Instead of

4 or 5 per cent., they were reduced to a return on their original invest-
ment of a fraction over 3 per cent., even on the company succeeding in
maintaining a steady 5 per cent, dividend. The hardship borne by the
long annuitants was an accidental one, arising out of so many of these
securities forming settled estates, whereas that borne by the redeemables
was universal, and affected any holder whatever his environment may
have been.

Then there is the position of the State, as affected by the conversion,
to be considered. It would have been inequitable to have thrown the
whole loss on the shoulders of the debt-holders. For, in so far as the
authorized agents of the State, who had been appointed to control the
execution of the scheme, connived at the spoliation of owners of govern-
ment debts, so far the State was responsible. The penalty for this
\ laxity was paid by the remission of the sum receivable from the
company for the privilege of converting the debts. The country as
a whole suffered by the breakdown of credit and the failure of bankers 2.

1 Proceedings of the House of Commons, vi. p. 114.

2 An attempt is made to provide a quantitative estimate of this loss in Considera-
tions on the Present State of this Nation as to Publick Credit, Stocks, the Landed and
Trading Interests, London, 1720, pp. 19-31.

Div. X. § 5 j] Effects on the Nation 1720-1 351

Against this however is to be set the gain accruing from the reduction
of interest, which was applied to the gradual paying off of the South
Sea capital, eventually resulting in the extinction of this portion of
the debt.

It might be hastily concluded that, since the price, towards the end
of the year 1720, was not far removed from that obtaining before the
conversion had been undertaken, the speculating class as a whole had
neither gained nor lost, the profit of one individual having been the
loss of another. Such an estimate however overlooks the fact that the
stock at the close of the year had been more than trebled, and that
nearly one-third of the total had been issued as against cash at prices
from 300 to 400, and that therefore a reduction of the quotation to less
than one-half of that at which these securities had been allotted, meant
a most serious loss in the aggregate. The distress thus occasioned,
serious as it was, became trifling when compared with the enormous
transactions on a credit basis. Immense purchases were made on
margins, and "options'" as well as sales for "forward delivery"' were
the rule rather than the exception. These dealings were so great — for
instance in the week ending August 22nd no less than 36,000 separate
transfers had been registered at the South Sea House ^ — that the strain
on credit gradually increased, until a breaking point was reached. The
speculator undoubtedly suffered by the manipulation of the market by
the directors. The price of the stock was artificial, caused by the
increase of the demand for, and a simultaneous contraction of the
supply, both brought about by indirect means. Under these circum-
stances, when it was no longer possible to support the market, the
reaction was most violent, and there was no opportunity given to
realize pawned stock before the price had fallen far below the margin.
This fact accounts for the numerous failures of bankers in September,
with a resulting disorganization of credit and industry throughout the
whole country. What differentiates this and the corresponding panic
in France from most collapses of credit was the fact that in both cases
it was the holders of government stocks who were primarily affected.
Any of these, who speculated by borrowing money on the stock they
received through converting, in order to buy more, were seriously
involved by the collapse. Now the ruin of a large proportion of the
" leisured classes " is a catastrophe which can be remedied only by very
slow degrees. Capital is withdrawn in innumerable directions, and the
whole commerce of the nation feels the contraction of its resources.

Many estimable persons are of opinion that the speculator deserves
little sympathy. It is constantly alleged that he is merely betting on
the future ; and, even if this is so, it would probably be admitted that
1 Caledonian Mercury , Aug. 22, 1720.

352 The South Sea Company [div. x. § 5 j

when the State sanctions such gambling (as it did in the case of the
South Sea company, through the connivance of responsible ministers),
that the play should be open and above-board. It has already been
shown that the market was fraudulently manipulated, and it was such
manipulation that constituted the real grievance of the ruined speculator
and made the successful one at least an unconscious accessory after the
fact.

But whatever may be one'*s judgment on the ethics of modern specu»fl
lation, in the seventeenth and eighteenth century, the State not only
encouraged but often represented such adventures of capital as a part of
the duty of a patriot. In this connection it is only necessary to refer to
the advertisements of the state-lotteries of the period. There is abundant
testimony that any, who spoke or wrote against the company when the
fever was at its height, were held to be disaffected ^ So that so far from
the speculator being blamed for his rashness at this time, it is to be re-
membered that all information that would enlighten him was discouraged,
while he was overwhelmed, and too often carried away, by data designed
to mislead.

While sympathy must be accorded to those who suffered by the
scheme ; in spite of the immediate loss and suffering, the nation may
be congratulated on having escaped through the impatience of the
directors and the rapacity of some ministers from greater possible evils
in the future. Reference has already been made to the dangers, con-
tained in the aggregation of such an immense capital for the time.
Had that capital been really organized on the system indicated by Law
and as originally intended, eventually a huge trust would have been
formed, more potent for evil than any yet established in the history of
Western Civilization. The capital actually "issuable" was close on
thirty-eight millions, this was more than four times as great as the
combined capitals of the Bank and the East India company. Like
these, it was lent to the State, and the resources of the three companies
consisted in the funds obtainable on the security of the government
debt. Further, the South Sea company had its surplus stock to
provide it with additional funds. In the corrupt state of domestic
politics, it was feared at the time that the company would be able to
control the ministry in power at any given period, and that therefore
it could secure parliamentary sanction of its schemes. If the directors
had not confined themselves to the manipulation of the stock-market,
they could soon have reverted to their original scheme of amalgamating
with or absorbing the Bank and East India company. The funds of

^ Cf. Archbishop King's Correspondence. Library Trin. Coll. Dublin MSS.
N . 3 . 6, f. 175. (King received many letters from Molesworth which supplement
in a number of particulars those of Broderick.)

Div. X. § 5 j] The Evils avoided 353

both were redeemable by Parliament, and a Parliament subservient to
the South Sea company would have been forced to sanction the con-
version of these debts. The African company was in an embarrassed
condition, and the stockholders would have sold, or could have been
compelled to sell, their property and privileges for about half a million.
This would have given to the company the monopoly of financial
operations at home and that of the whole British trade south of the
Equator. Nor would the consolidation have ended at this point.
Much of the home trade would have eventually fallen under the control
of the trust, and in time it would have subjected British industry to the
will, even to the caprice, of the directors of the company. If such a
trust had been formed in Britain, its power could only have been curbed
by a revolution against the new plutocracy. Therefore, however dis-
tressing were the scenes of the autumn of 1720, these were a small price
to have paid to escape the greater tragedies of an outbreak such as
occurred in France at the close of the century.

S. C. III.

354

The South Sea Company [div. x. §

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360

The South Sea Company [div. x. § 5 j

1711.
1715.

1719.

1720.

Summary of the Capital of the South Sea Company (1711-20).
Final Figures.

Total debts subscribed with deficiencies, &c

Additional stock for arrears and service of the year . . .

Total 1715

Stock issued in exchange for Short Annuities subscribed

Total 1719

Stock authorized for Irredeem-

ables exchanged £12,069,949 2 6

Stock authorized for Redeem-

ables exchanged 13,985/109 14 2|

£ s. d.

9,177,967 15 4

822,032 4 8

10,000,000
1,746,844

0 0
8 10

11,746,844 8 10

26,055,358 16 8^
£37,802,203 5 6|

C. The Reduction made by the Company to the Second Group
of Subscribers in September 1720.

Long Annuities capitalized at 32 years' purchase and converted into South

Sea stock at 4^0.
Short Annuities. Lottery Loan of 1710 Prizes and Blanks, 17 years'

purchase and converted in South Sea stock at 4^0.
Third and Fourth Money Subscriptions were taken for South Sea stock

also at 400.

D. Highest and Lowest Prices and Dividends on South Sea Stock.

Year

Prices

Dividends

Date of highest price

Highest and lowest
prices

Date of lowest price

1711

Nov. 19

82— 71^

Dec. 12

1712

June 6

88i-71|

April 4

1713

June 12

971-82*

Jan. 23 to Feb. 20

1714

Sept. 17

99—82

July 30

1715

May 6

lOlJ— 88

Oct. 26

1716

Oct. 14

llOj— 96t
120j— 9.5; '

July 6

1717

Dec. 23—30

March 8

1718

Feb. 10

120—1031

Nov. 20

1719

Nov. 26

1271-107

March 6

1720

June 25

1050—124

Dec. 14

101

Midsummer, paid in stock.

DIVISION XI.

UNDERTAKINGS FOR EFFECTING INSURANCES.

SECTION I. THE EARLY HISTORY OF INSURANCES

IN ENGLAND.

Just as production was at first carried on under the domestic system,
so insurance at a very early period in England had reference to the
provision against the various adverse conditions that might befall a
family or any one of its members. This characteristic was of equal
importance with the social one in the organization of the Saxon and
Anglo-Norman gilds. These bodies provided against losses from fire,
besides securing gildsmen an income during sickness, arranging for their
burial and, in some cases, making loans to members or their children,
either without interest or at a low rate. On the decay of the original
undifferentiated gild, some of its functions were continued by its
successors the gild-merchant, the craft -gild, the city company and, even
to a small extent, by the regulated and joint-stock companies. Between
the fourteenth and seventeenth centuries social conditions had been
changing. On the whole, although death by violence was still only too
common, life-risks had become less. The more permanent style of
domestic architecture should have tended to diminish losses by fire ; so
that, great as were the risks to life and property from a modern stand-
point, it may have appeared that the need for insurance was not so great;
and, at the same time, the decline of the gilds had removed the
organization, through which hitherto the provision had been made.

While the practice of something resembling fire and life insurance seems
to have diminished, the principle of assurance was being developed in quite
a new direction, namely in securing against marine risks. The method,
by which this was effected, introduces the new element of the substitution
of a proprietary for a mutual insurance. In the gild the members
really constituted a species of benefit society, whereas marine insurance
was conducted by persons who had no special connection, outside that
transaction, with those assured.

It is difficult to determine how early this species of transaction began.
It may have been a development of the fcenus nauticum of the later
Roman Empire ; or, on the other hand, the loan on bottomry may have
been called into existence independently to meet the exigencies of the

364 Early Marine Insurance [div. xi. § 1

case^ A loan on bottomry inverts the modern practice in marine
insurance. The assured or borrower obtained the advance of a specified
amount of capital, on condition that he should repay it, together with
a premium on the return of his ship — the ship itself being the security.
If the vessel were lost, there was no obligation to make good the sum
lent^. During the Middle Ages the position of the Church with regard
to usury made this form of investment a favourite one for persons, who ^
had capital at their disposal and who did not wish to undertake the a
trouble of management in a partnership.

As early as the thirteenth century there appear to have been traces '
of bottomry in Italy ; and, by the fourteenth century, it was common in ■
Germany^. In 1453 an ordinance relating to marine insurance was *
promulgated by the magistrates of Barcelona^, and the practice is said
to have been adopted in England at an earlier date by the merchants of
the Steelyard and by the Lombards'*. In an act passed in 1601, estab-
lishing " an office of assurances,'' it is stated that there had been " tyme
out of mynde an usage amongste merchantes both of this realme and of
forraine nacyons " of this nature^.

It would seem that, at first, marine insurance was conducted as a
part of a general financial business, either by a body of merchants, such
as those of the Steelyard, or by the goldsmiths. By 1574 the company
of notaries had established a custom that policies should be registered
by its members, and this body complained bitterly when a patent was
granted in that year to Richard Candler for such registrations. It would
appear that the notaries were not able to make good their claim, for in
1628 a patent was granted, conveying the monopoly of the registration j
of insurances within the city of London for thirty-one years'. As time
went on, it may be concluded that marine insurance became more
specialized ; and, towards the end of the seventeenth century, the class
of underwriters began to come into existence, as a body of persons who
made this business their chief occupation. Although the amounts
underwritten by individuals were smalP, yet the captures during the

^ For the very early history of Marine Insurance vide The Insurance Gyclopcedia
being... an historical treasury of events and circumstances connected with the Origin and
Progress of Insurance, including a history of all known Insurance Offices founded in
Great Britain from the Beginning, by Cornelius Walford^ i. pp. 333-8.

2 An Introduction to English Economic History and Theory, by W. J. Ashley, i.
Part II. p. 422.

2 Walford, Insurance Cyclopaedia, i. p. 338.

* The History of Lloyd's, by Frederick Martin, London, 1876, p. 23.

^ Ibid., pp. 6, 23. « Statutes, iv. Part 2, pp. 978, 979.

' Fcedera, xix. p. 987; State Papers, Domestic, Charles I., xcii. 13; Calendar,
1628-9, p. 541.

8 Cf. an interesting document, dated about 1654, setting forth the premiums and
sums underwritten, printed by Martin, History of Lloyd's, pp. 52-4.

Div. XI. § 1] Marine Insurance 1662-1720 365

French war in the time of William III., amounting it is said to 15
millions between 1690 and 1692^, ruined very many of them ; and, in
1694, it was necessary to pass a special act of Parliament to protect
them from their creditors^.

The act of 1694 brought to light a point that had been raised thirty
years earlier and which was again debated in 1719-20, namely the
respective merits of individual underwriters, as compared with a joint-
stock company. In 1662, Col. John Russell had petitioned for privileges
for a proposed marine insurance company which was intended to have a
capital of ^100,000 or more 3, and in the same year a request was made
for a charter of incorporation. It was then stated that the premiums
averaged five per cent., and that it was expected the receipts would be
£Yl5fi00 a year. The promoters hoped that, if the company were en-
couraged by an act of Parliament, in time it would become the insurance
office of Europe ^ There is no evidence that this undertaking was actually
founded^, and it was not until the eve of the South Sea period that
joint-s^ock marine insurance, as far as is known, came into existence.
Then it was alleged that many of the private underwriters had failed,
and two undertakings — the existing London and Royal Exchange
companies — were founded on the security of a sum of money, lent to the
State^. Too little is known of the methods of the individual under-
writers to enable the merits of the controversy, between them and the
advocates of the joint-stock principle, to be determined. Although
Lloyd's Coffee House had been established towards the end of the
seventeenth century, as yet nothing corresponding to the modern Lloyd's
had come into being''. The underwriters met together and were able to
see their clients at a convenient place, but there seems to have been
nothing of the nature of security required from them. ITierefore,
supposing a joint-stock company were established, which would be bound
to hold a certain proportion of its capital in some easily realizable
security, those insuring with it would have had certain advantages.

1 An Essay upon Projects, 1697, p. 5.

2 Journals of the House of Commons, xi. p. 5.

3 State Papers, Charles II., Trade Papers, cxxxiii. pp. 70, 71 ; Calendar, 1661-2,
p. 446.

4 Ibid., Domestic, Charles II., lxvi. 53; Calendar, 1661-2, p. 615.

s A copy of the form of marine policy of the time of Charles II. is printed
in The Merchant's Bayly Companion, printed for Thomas Malthas, London, 1684,
pp. 351-4.

6 For an account of these companies, vide infra. Section iv.

7 The ''Marine Coffee House" at this period was a rival to "Lloyd's." The
former was a favourite place for the taking of subscriptions for new companies
during the South Sea period— cf. infra. Division xiii., Nos. 18, 24, 28, 34, 75, 86,
101, 182.

366 Early Accident-Insurances [div. xi.

Further, the perpetual succession of the company would enable \hi
assured to escape possible delays, in the event of the death of th«
individual underwriter.

As against these advantages of the company, as compared with thd
position of the individual underwriter at the beginning of the eighteentl
century, there is to be set what was a distinct but temporary disadvantage,
namely that although several successful fire and life insurance companies
had been established before 1720, there had been many undertakings iiJ
these groups which had failed. The insurance-boom of 1710-11 was (or"
at least should have been) remembered, and many insurers may have
thought that there was the advantage, in dealing with an individual
insurer, that he was capable of being more easily reached, than a-
partnership. ^

Mention of the insurance undertakings of 1710-11 renders it
necessary to glance back at the progress of life and fire insurance ; for,
although marine insurance, on a non-mutual basis, was earlier, it was
the last of the three groups to be developed by means of joini-stock
companies.

After marine insurance came some form of provision against certain
adverse life-contingencies. It is stated by Francis that persons, who
intended to make pilgrimages to distant countries, were in the habit of
effecting a bargain, before they started, by which, in consideration of
a certain payment, the assurer agreed to provide a ransom for the
assured, in the event of the latter being taken captive. Similar arrange-
ments were made by merchants who went on trading voyages. Or
again, the contract might be of a different nature, when the traveller
would deposit a sum of money on the understanding that, should he
return to claim it, he was to receive a large addition to his deposit; if he
failed to arrive home, the assurer retained the amount lodged with him^

Such arrangements might be best described as an anticipation of an
accident-insurance. Before life-insurance could be started, it was
necessary that there should be some knowledge of the expectation of life
at any given age. Although it was long before reliable data were
reached, two different tendencies were coming into existence, at the
beginning of the seventeenth century, which collected the necessary
materials for such calculations. One of these was the compilation of
the " Bills of Mortality "" in London after an outbreak of plague in 1592,
which began by recording the number of deaths and afterwards the
nature of the disease. To enable conclusions to be drawn, a reliable
estimate of the population, aff*ected by the statistics, was required ; and,

* Annals f Anecdotes and Legends of Life Insurance j 1853, pp. 35, 36 ; Walford,
Insurance Cyclopcedia, i. pp. 62, 442, 443; Merchant's Bayly Companion, ut supra,
p. 356.

Div. XI. § 1] Expectation of Life 367

towards the end of the seventeenth century, the investigations of Petty
contributed to this objects The other tendency was rather practical
than theoretical. It arose from the growing custom of the paying of
a sum of money in return for an income for life, or again the purchase
of a reversion dependent on a life, or of a charge on a life-estate, or of
a part of the profits of an office, the holder of which borrowed on his
income from this source ^ Transactions of this kind were almost a
necessary consequence of the numerous grants of James I. and Charles I.,
as well as of the prevalent system of land tenure, although such operations
are generally described as belonging rather to the nature of money-
lending than to that of insurance ^ Thus Briscoe describes how this
"servile yoke... has eaten up several estates^" Naturally, while as yet
the insurance of life-contingencies was unspecialized, contemporary writers
would speak of such transactions as loans ; but, at the same time, the
essential characteristic, that the rate depended on the duration of a life,
should not be ignored ^ One of the many methods, by which loans
were floated early in the reign of William III., was by means of annuities
on one, two or three lives, but these were subsequently converted into
long term annuities. Therefore, except as showing the increased
attention that was being given to the expectation of life, the account of
these obligations belongs rather to the financial operations conducted by
the Bank of England and the South Sea company than to the history of
insurance^

In spite of the interest shown in the duration of life, materials were
as yet much too incomplete to enable life-insurance, as it is now
known, to be started with any hopes of success. Indeed, prior to the
investigations of Halley in 1693, it was generally accepted that the
expectation of life was about seven years. Therefore, it could not be
expected that, when life-insurance was started, any gradation of premiums
could be made proportionate to the age of the assured. Moreover, when
the assumed expectation of life was no more than a guess, it would have

1 Even before the time of Petty some efforts had been made to ascertain the
population of London ; thus as early as 1636 a statement was framed, which professed
to give the number of inhabitants of the City at that time— Londinopolis, by John
Howell, 1657, p. 403.

2 Cf. Merchant's Dayly Companion, p. 355— "Other assurances are made upon
the lives of men and women, at a rate that is moderate. For by this means if you
buy any place or office that is worth £1,000 or more, or less, and have not money
enough to purchase it, you borrow 4 or 500 1. Now if you die and are not in a
condition to pay this money, it is lost : But if you insure your life then your friend,
that you did borrow it of, will have his money honestly paid him."

3 A Caution against Suretiship designed for the Benefit of English Subjects, by
R. A. Rector of Shrawarden, 1688, pp. 1-37.

* Advertisement of Briscoe's Land Bank, p. 2 [Brit. Mus. 8223 . e . 7].

^ Walford, Insurance Cyclopcedia, i. pp. 100-102. « Vide mpra, pp. 289, 290.

368 Tontine Life Insurances 1698-1714 [div. xi. §

been exceedingly hazardous to have founded an undertaking, whi
would have promised to pay a fixed sum on the death of a member.

Apparently, under such circumstances, any kind of life-insurance w
impossible, but, by a modification of the tontine system, a method was
adopted which continued in force for a number of years ^ Those, who
were willing to join, agreed to pay a sum on entrance and a fixed amount
annually during life or the life of a nominee. The funds, thus collected,
were subject to a specified deduction for management, and the remainder
was divided amongst those who were entitled to claim in any given year.
There was no classification made as to age, although the very young and
the very old were excluded. It is obvious that the effect of this system
was to provide an unequal payment for equal premiums, since the sara<
sum was divided, irrespective of the number of deaths.

It was on this basis that the Society for the Assurance of Widows
and Orphans was founded in 1698-9, as well as the Amicable in 1706.
A different system was adopted by an insurance undertaking, established
by the Mercers' company in 1698, the idea being worked out by
Dr Ashton, with a view of providing an income for widows of the clergy.
The origin of this scheme is to be sought in the prevalent taste for
annuities ; and, since presumably the clergy, in most cases, found it
difficult to accumulate sufficient capital to purchase an annuity for their
widows, it was proposed that the Mercers"* company should collect sums
saved, guaranteeing the payment of an annuity at the rate of 30 per
cent. Even allowing for the high return on capital at the time, the
terms offered erred on the side of excessive generosity, and the claims
soon exceeded the premiums received. In 1738 it became necessary to
reduce the annuities by one-third, and by 1750 relief from Parliament
had to be obtained^. The failure of this scheme, even when supported
by a body with sufficient resources, shows clearly how little was known
of the expectation of life in the first half of the eighteenth century. So
far was the unsoundness of this scheme from being suspected for some
years after its inception, that it rather gave rise to imitations. One of
these, promoted by George Jenkins and William Causton, proposed in
1714 to form a society of 500 persons by which an annuity for the
widows of members could be obtained by a single capital payment. It
had at one time been intended to offer annuities of 50 per cent, of the
sum deposited but, " Parliament having thought it necessary to reduce
the rate of interest," 40 per cent, was finally proposed ^ The quasi-

^ Lorenzo Tonti is said to have proposed his scheme in 1653. Earlier Years of
the Funded Debt [C. 9010], p. 3.

2 Maitland, History of London, p. 1232.

^ A Proposal for Settling Jointures and granting Annuities after the rate of 40 /.
per cent, per annunij 1714.

Biv. XI. § 1] Marriage Insurances 1710-12 369

tontine method of life-insurance was not subject to this drawback. It
possessed the advantage that bona fide insurers might protect those
dependent on them against destitution, in the event of the premature
decease of the bread-winner. Besides, given honesty in the management,
a society under the conditions indicated could not fail, since it only
divided the premiums. In such a safe method of business, there was no
need of a subscribed capital, for there was no danger of an undertaking
of this kind having to bear a number of unfavourable years. Therefore,
mutual societies were most common in this class of business, although
there were several joint-stock undertakings.

It is obvious that this system could be applied in many other
directions; and, once it began to be seen that the revenue from the
management of an insurance-office provided a steady income, numerous
extensions of the original idea were launched from 1710 to 1712. There
were at least several hundreds of these offices, all founded on similar lines
and differing only in the class of risk they undertook. A few were
concerned in life-insurance proper, but the majority occupied themselves
with the provision of a sum on the marriage of the nominees. The
policy-holders paid a certain sum every week ; and those of them, who
were married at a certain date, had the premiums received divided
amongst them and they then retired from the society. Subsequently
a refinement was introduced, by which the membership was fixed at
a certain number {i.e. 1,000, 2,000, or 4,000), and the first 100 persons,
who joined (or their nominees), were to remain single for a month, the
second hundred for two months and so on\ Probably at first the policy-
holders received considerable returns. In one case a bonus of 20 to 1 is
mentioned S and in another 2^. to 8^., paid in premiums, secured a division
of about £bO^. As much as <£300 or ^400 was promised under favour-
able conditions^ It is plain that, unless there were lapsed policies
through the assured or their nominees not marrying, since there could
be no increase to the premiums except by compound interest, the more
any member obtained, the less would remain for the others, calculated
in terms of the quarterly or weekly premium. The amounts, divided at
a given date, were, it is true, of equal amounts, but the benefit derived
by any member would depend on two speculative elements — first if he or
she became eligible early, that is before many premiums had been paid,
and secondly upon the number of other claimants at that distribution.
If the earlier benefits were great, through there being few eligible, more
would remain to reduce the sum payable to each subsequently. It is to

1 E.g. Advertisement of the '^Generous Society at Templemau's Coffee House"
in The Tatler, No. 254.

2 The Charitable Society, in The Tatler, April 11, 1710.

3 Post-boy, Aug. 3, 1710. * Postmauj Jan. X9, 1710.

s. c. III. 24

370 Christening Insurances 1710-12 [div. xi. § 1

be remembered too that the longer the time that elapsed before a member
was able to claim, the more premium he or she had paid. Therefore,
the only way, whereby the member of a society, in which the early
distributions were high, who did not qualify for a considerable time,
could receive back his or her premiums, would be through lapsed
policies, or through the claimant being exceptionally fortunate in the
time at which the claim matured. In the latter case, the gain of the
individual would tend towards the loss of some of those still remaining
in the tontine ; so that, on the whole, some of those, assuring by this
method, stood to lose considerably. In fact, under the guise of societies
for encouraging thrift, these undertakings contained a considerable
element of speculation, and it was this that made them so popular for
a time.

Just as insurances for marriages had been grafted on tontine life-
insurance, so the insurance of children was the complement of the
marriage policies. These undertakings assumed various forms. There
were first the offices, which insured a sum payable on the christening of
a child, born in wedlock to a member. Then there were those that
undertook to pay either a definite sum or to give a share of a certain
sum to the parents of children who reached a certain age^. Closely
connected with the last were offices for the provision of a sum of money
for youths, when they had completed their apprenticeship. It is
interesting to note that the Hudson's Bay company conducted this class
of business ^ Another development of the same principle was onei
confined to domestic servants, who contributed a small sum per weekj
which was divisible amongst those who remained in their places for
specified length of time^. Evidently even as early as the beginning oi
the eighteenth century there was " a servant problem,"" and the handi
maidens of the time required to be compensated for remaining in the!
situations. Besides all these, there was a scheme in 1711 which was
be established as the Amicable Corporation for the henejit of Seamen take
or lost at Sea, and for the relief of their widows a7id families^

Amidst so many offices for the same kind of insurance, it was almost
inevitable that, through competition, more favourable terms should

1 E.g. "Society without Loss/' Daily Courant, No. 2850, Dec. 11, 1710; Walford,
Insurance CyclopcBdia, i. p. 319.

2 Postman, Aug. 19, 1710 ; "Algron's Society," State Papers, Domestic, Petitioij|
Entry Book, x. pp. 72-3; Walford, Insurance CyclopcBdia, i. pp. 177-9; vide supra,
II. p. 234.

» Cf. "The Just and Amicable Society" kept oj the Widow Pratt Brit. Mus."!

1890.b.5"[
34 J*
* State Papers, Domestic, Petition Entry Book, xi. p. 284.

Div. XL § 1] Gamble in Life Contingencies 1710 371

offered intending members, than could be carried out. Very few of the
undertakings proposed to give any security for the discharge of their
promises, and probably none had any real assets against which a claim
could be enforced. As disappointed members ceased to pay their
premiums, the amounts, available for division, would become less, and
every inducement tended to make the societies repudiate their engage-
ments.

Francis gives a graphic, but possibly imaginary, picture of the
results of the collapse of the insurance boom. "There is something
very painful,'" he writes, " in the recollection that the sufferers were
those who could least afford it. It was not the grasping Hebrew who
invested from his full store... .It was the poor and thrifty man, who,
denying himself, to secure his children a provision, was involved in loss^"
There is reason to believe that, although without doubt there was a
movement in favour of thrift, the general character of the insurances,
made at this period, constituted a gambling in life-contingencies. One
advertisement which states that the lives of persons may be assured,
without their knowledge, has rather a sinister sounds The same
tendency appears in the particulars of life-assurances, effected by the
Traders' Exchange House Office for Lives, which was founded by Povey
about 1706. There are details of thirty -four policies; and, in every
case, the benefit was taken out on the determination of the life of a
nominee^. Obviously, when almost any life-risk would be accepted, it
was to the advantage of the person, paying the premium, to select the
worst life.

It might be thought that the insurance of a sum, payable on
marriage, was of a distinctly provident nature, but there is reason to
doubt that this was always so, even in the case of one of the leading
offices, founded by a William Smith and known as the Political Society
fcrr Insurance on Marriage Inept at an office in Bolt Court, Fleet St.
Smith claimed in November 1710 that he had been the first to erect an
office for the " insurance of marriage '' of young persons : 2,1 00 members
had joined, who had subscribed " on their own or others' marriages for
their own benefit." He had given security for =£'1,000, and trustees
were chosen^. Although a company disputed Smith's claim to priority,
he duly obtained a patent, and his enterprize appeared to be genuine ^
The sequel may be gathered from the petition of Elizabeth Hudson,

^ Annals, Anecdotes and Legends of Life Assurance, p. QQ.

2 " The Office of Ingurauce on Lives at the Rainbow Coffee House in Cornhill,"
ij)aily Courant, No. 2582, Feb. 1, 1710.

3 Povey, General Remark, No. 215, reprinted in An Account of Fire Insurance
"Companies, by Francis Boyer Relton, London, 1893, pp. 511-13.

* State Papers, Domestic, Petition Entry Book, xi. p. 108.
^ Ibid., Petition Entry Book, xi. p. 169.

24—2

372 Prohibition of Marriage Insurance 1712 [div. xi

widow, and several other subscribers to the society, dated October Ist,^
1712. The petitioners had all paid their premiums on nominees, and
the wording of the document suggests that marriages had to be arranged^
so as to secure the benefit of the policy, and that the policy-holders"
made payments for this purpose. The marriages took place according
to the terms of the policies ; and those, who had paid the premiums,
claimed their share in the distribution to which they were entitled.
The office failed to carry out its engagement, and Mrs Hudson was in
great distress, because she had given promissory notes to persons, " she
had prevailed with to marry," which she was not able to pay. Eventually
Smith was compelled to discharge a part of his obligations by making
weekly payments on accounts jl

These and other scandals directed public attention to the evils of th^
minor insurance offices ; and, by a clause in an act passed in 1712, it was
declared illegal, under a penalty of c^500, to erect undertakings for
insurances on marriages, births and christenings ^ During the excite-
ment of the year 1720 there were numerous life-insurance schemes.
These appeared to have been founded on the tontine system, but none
of them came to maturity.

There remains one species of insurance as yet undealt with, namely
the provision against loss in the case of fire. It seems that, for several
centuries after the dissolution of the gilds, there was no organization
to carry on this class of business. Proposals for establishing fire-
insurance were made in 1635 and 1638 ; but, though as early as 1591
the system was in operation at Hamburg, it was not until after the
Great Fire of London that offices began to come into existence in
England^. The earliest undertaking that can be traced is that established
in 1667 by Dr Nicholas Barbon, a prominent building speculator and
the author of a Discourse of Trade (1690)*. This office was at first
known as "Barbon's," and it continued in Barbon's hands till 1680,
when it was transfen-ed to a company, and it was then described as the
Insurance Office at the hack-side of the Royal Exchange. Two years
later, on changing its offices, it was known as the Office at the Rainbow
Coffee House near Fleet St.^ Owing to the frequent changes of title of
these early undertakings, it will be easier to follow their history by
giving a brief account of the order in which they started business,

1 State Papers, Domestic, Petition Entry Book, xi. p. 525. J

2 Statutesy IX. p. 383 (9 Anne c. 6, § 67). *

3 Relton, Fire Insurance, ut supra, pp. 7, 11 ; Walford, Insurance Cyclopcedia,
III. p. 441.

* Barbon appears to have been a son of Praise God Barebones and he may
have been one of those christened If-Christ-had-not-died-thou-hadst-been-damned
Barebones or Christ-came-into-the-world-to-save Barebones.

^ Walford, Insurance Cyclopcedia, iii. pp. 444-6,

Div. XI. § 1] Fire Insurance 1591-1703 373

postponing for the present the detailed statement of the careers of those
of most importance.

It may be noted that the development of fire-insurance differed from
that of life and marine insurance, in so far as the former was conducted
mainly, but not altogether, by companies, while life contingencies were
undertaken on the mutual basis and marine risks by individuals. Thus
the Fire Office of 1680 was the first insurance company, although this
class of business was the latest of the three main kinds of assurance to be
started. The need for a security to be given by a fire office probably
accounts for the association of a number of capitalists in the venture.
If life contingencies, provided against on the tontine system, were honestly
conducted there was not the same necessity, and therefore it is intelligible
that these should at least profess to be mutual. In marine insurance,
security was required, even more than in the case of the fire offices, but
it would appear that the business had grown up so gradually that it
remained the undisputed possession of individuals, until numerous
failures suggested the advisability of trying the joint-stock system which
had by that time been proved in the department of fire-risks.

The company owning Barbon's office was far from obtaining a
monopoly for, about 1682, the London corporation began to undertake
the same class of business, and soon afterwards two partners established
a mutual office known at first as the Friendly Society. There were thus
undertakings, started by a joint-stock company, by the municipality and
by a mutual society. Competition was very keen, and a number of
leaflets and pamphlets were published on behalf of each office ^ In 1696
the Hand in Hand society was founded under the title of the Amicable
Contributors Jhr Insuring from loss by Fire. About 1703 the Charitable
Corporation began to make fire-insurances.

The general character of the business, established by these under-
takings, was the insurance, up to a certain maximum amount, of buildings.
The only classification of risks attempted was in the differentiation between
brick and wooden houses, the premium on the latter being double that
on the former. Inducements were offered to persons insuring to join for
a period of years. These characteristics were common to all the offices ;
and, in the further working out of the system, there was a difference
between the joint-stock and mutual societies. The former, through the
security deposited in the names of trustees, were in a position to pay
claims, even although the sums, received from premiums, had already
been exhausted. A mutual society, on the other hand, was constituted
on the basis of exacting less for premiums, and making up any deficit,
when required, by a levy upon its members. Thus in 1694 the Friendly

1 The important parts are reprinted by Mr Relton in Fire Insurance, pp. 29-41.
This work embodies the fruits of much research on points of difficulty, and copious
extracts from rare publications are given.

374 Insurance Schemes 1714-20 [div. xi.

society called in 5*. 0\d. on each d^lOO insured by its members on the
occasion of fires at Eastcheap and in the Strand, and also 9>s. 2|^c?. per
cent, on account of losses at the Lombard St. fire\ ■

Up to 1706 fire-insurance had been confined to provision for losses on
buildings, and in that year Charles Povey first founded offices to insure
against losses of goods and merchandize 2. One of these was for London
and the other for the country. Both were eventually transferred to the
Company of London Insurers^ which became known as the Sun Fire Office.

In 1714 another society, known as the Union or Double Hand in
Hand Fire Office^ was founded on the same lines as the Sun. It was
intended to supplement the Hand in Hand and to work in conjunction
with it. A few years later provincial undertakings began to come into
existence. An office at Bristol, carried on by a company, was established
in 1718. About 1720 a mutual society was founded at Edinburgh and
described as the Friendly Insurance Office^. Soon afterwards another
Edinburgh company was formed on a joint-stock basis, which was called
the Edinburgh Society for Insuring Houses against loss by Fire, Like
so many other ventures of the same period of excitement, this under-
taking endeavoured to enter upon other kinds of business, and the
management attempted to absorb the Bank of Scotland. This design
was frustrated, and the company was dissolved under the Bubble Act^

Elsewhere in the provinces, there were numerous insurance schemes
in 1720. For instance, at Dublin, a company was proposed. Archbishop
King wrote, on September 30th, 1720, of it, that " we only want the
settling of some such to complete our misery. I believe the city of
Dublin since I knew it, which is fifty-four years, has not suffered by fire
the loss of c£3,000 ; but, if the fire-insurance go on, I should dread every
night that St Sepulchre's "^ would be burnt upon me before morning*."

The same period of excitement was marked in London by many
insurance proposals. Some were intended to rival the existing fire, life,
and marine undertakings, while others branched out in new directions.
Amidst schemes that were chimerical, there were some that anticipated
developments realized later, such as burglary insurance, the insurance of
debts and of live-stocks These ideas, like others of a visionary character,
such as the insurance against death from rum-drinking, or that of
female chastity, suffered from the inflated capital proposed, the stock
mentioned being a minimum of a million, while two millions was common.

1 London Gazette, No. 2966, April 12, 1694.

2 In The Merchant's Bayly Companion (1684) mention is made of insurances of
goods ^' sent by wagon or cart, &c. by land from all robbers or thieves," p. 355.

3 Th£ History of Edinburgh, by Hugo Arnot, Edinburgh, 1779, pp. 53, 54.

* Vide supra, pp. 271, 272. ^ His residence.

* MS. letters of Archbishop King (Library, Trinity College, Dublin, N . 3 . 6),

f. 127; cf. infra, Division xiii., No. 185. J

^ Cf. infra, Division xiii., Nos. 33, 42, 92, 105, 157. ' 1

SECTION 11. UNDERTAKINGS FOR INSURANCE
AGAINST FIRE.

A. The Insurance-office at the Back-side of the Royal
Exchange, or the Fire Office, or the Phoenix
Fire Office, or Samuel Vincent, Nicholas Barbon
and their partners for insuring houses against
Fire, or Barbon's Office (1667-1703).

The fire office, founded by Nicholas Barbon about 1667, was conducted
by him until 1680, when, through various losses he had sustained, it
became necessary to mortgage the ground-rents, vested in trustees, for
the security of holders of policies \ The company was formed with a
view to paying off these incumbrances, so that it may be conjectured
that the sum, paid to Barbon for the goodwill of the business, consisted
of the discharging of the loans borrowed on the ground-rents. When
this arrangement had been completed, the rents, vested in trustees for
security, amounted to £^,106 a year^. It would appear that the whole
undertaking was divided into twelve shares, of which Barbon held one ;
at all events there were twelve persons who were the proprietors of the
office and who were known as the " Insurers ^^

The company soon had to face the competition of the Corporation
and the Friendly society ^ Although the City soon retired from the
business, the duel between the two companies continued from the
foundation of the Friendly (1683-4) until 1687. In the previous year
the company, owning Barbon's office, which was then described as the Fire
Office or with more detail as Samuel Vincent, Nicholas Barbon... and their
partners for the insuring of houses from Fire, endeavoured to obtain a
patent, which would give them the exclusive use of the " invention " of
fire-insurance. On April 8th, 1687, their petition was presented, and on
April 29th the proprietors of the Friendly society were heard before the

1 Relton, Fire Insurance^ ut supra, p. 27, note 2.

2 Ibid., p. 29.

3 Anglioe Notitia, by E. Chamberlayne, London, 1692, ii. p. 297.
* Vide supra, p. 373.

376 The Fire Office 1680-1703 [div. xi. §

Privy Council. After both sides had appeared several times, proposals of
accommodation were handed in on December 2nd, and the case was argued
on the 16th. It was decided that the method of insurance adopted
by the Friendly society " was of more benefit and satisfaction to the ^
public ■" than that of the Fire Office ; and James II. ordered a patent to f
be granted to the former, recommending the proprietors "to preserve
Vincent and his partners from ruin.'" Six weeks afterwards the Fire Office
had induced the King to reconsider his decision, and on January 30th,
1688, the following order was made. The joint-stock undertaking was
to receive a patent, prohibiting the Friendly society and all others from
insuring houses for one year after the date of the patent, that would be
until the beginning of 1689. After the expiration of a year, each under-
taking might insure for three months in rotation — that is the Friendly
society might underwrite policies for the first three months, but not the
Fire Office. For the second three months the Fire Office was allowed to
accept business, but the Friendly society was to remain idle, as far as
issuing new policies was concerned \ It does not appear that the pro-
posed patents were issued, and probably political events precluded this,
as well as the enforcing of the alternate three months of quiescence.

After the Revolution there are frequent notices of the activity of the
company. These chiefly relate to the rates of premium charged 2, and
the number of those insured. About 1692 there had been insured in the
previous six years 5,650 houses, as compared with 3,400 in two years and
a half by the Friendly society ^ From the end of 1694 to 1696 there
were occasional transactions in the shares, and Houghton quotes them
at 50 during that period "*. When he compressed his list on the collapse
of the boom in industrial companies, he omitted this undertaking, which
had appeared under the heading of " Water and Insurance,"" or " Banking
and Insurance"*' as "Barbon.'"*

Although advertisements were issued in 1700, the company had become
disheartened since 1697. In a petition, dated November 27th, it was
stated that, in spite of the order of 1688, several new offices had been
started in addition to the two earlier ones. The company had been
advised by counsel that it could not sustain its quasi -monopoly under
the grant of 1688, " which was wholly void and was so at the making
thereof."" Accordingly, the management asked that the company should
be relieved of its obligation to pay £60 a year to the Crown, and that it

* State Papers, Domestic, H. O. Warrant Book, iv. p. 383. The records of the
various proceedings are printed by Mr Relton in Fi^'e Insurance, pp. 40-3.

2 Most references of this nature are reprinted by Relton in Fire Insurance,
pp. 44, 45.

2 AnglicE Notitia, ut supra, 11. p. 298.

^ Collections', cf. Plate, vol. i.

Div. XI. § 2 a] The Phoenix Fire Office 1705-12 377

might retire from business ^ On May 15th, 1703, the Solicitor-General
recommended that the surrender of the patent should be accepted, and
that the annual payments since 1697 should be remitted, at the same
time suggesting that the company might divide that amount amongst
the governors^.

It would naturally be expected that after these proceedings the
company should have been wound up either in 1703 or 1704, but in
1705 the Phoenix Fire Office issued proposals from its office at the
Royal Exchange, stating that "this office hath insured houses for
twenty-four years past," and it is difficult to determine whether the
Phoenix is only a new name for the Fire Office, but owned by the same
company, or whether a new undertaking had been formed about 1705,
which carried on its business at the same address and took over the
liabilities of its predecessor. Mr Relton regards the Phoenix as a new
name for the old Fire Office, but there is reason to believe that there was
a greater change than this^. The old company may have been sold to
another one, formed to acquire the business, and this interpretation of
the situation is supported by the language of the petition of 1702. At
the same time, it is to be remembered that in a document of this nature,
designed to obtain relief from a liability, the intention of giving up the
undertaking might be overstated, and the personal views of the members,
expressing a want of hope in the future, is to be differentiated from the
actual winding up of the concern. On the whole, it appears probable that
there was a reorganization between 1703 and 1705, and that this was
carried out by the majority of the shareholders in 1702 selling their
holdings to others. This view is confirmed by a comparison of proposals
issued from "the office against the Royal Exchange'' in 1700 and in
1705. In the earlier year there were sixteen insurers and in 1705 only
thirteen, and the later list contains some new names ^.

Not only was a new emblem adopted, but for some years after 1705
a branch for carrying on one side of the undertaking, as a mutual society,
was started. A policy is in existence, issued by this company in 1712,
and after that date further information is wanting. From an advertise-
ment by the Friendly society in 1717, it might be inferred that the
Phoenix company had retired from business^; but, on the other hand,
since Strype in his edition of Stowe's Chronicle (1720) gives a long
account of the Phoenix Fire Office, it would appear that at that period
it was still in existence. But, from the fact that there is no mention of

1 State Papers, Domestic, Petition Entry Book, vi. pp. 43, 44.

2 Ibid., Petition Entry Book, vi. p. 93. Probably the reference to " the patent"
in the text refers to the license or order of 1688.

3 Fire Insurance, p. 47 ; cf. Walford, Insurance Cyclopedia, in. p. 404.
* Relton, Fire Insurance, pp. 45, 47. ^ ^^id., p. 50.

378 Mutual Fire Societies 1683 [div. xt. § 2a

quotations of the shares of this undertaking during the excitement of
1720, it may be concluded that the company was not then in being.
Had it survived its securities would almost certainly have participated
in the general inflation, and the management would have entered an
appearance at the Parliamentary enquiry into the various insurance
schemes of the period.

B. Mutual Societies from 1683 to 1714.

The Friendly Society (1683).

The Hand in Hand Society or the Insurance from Loss

BY Fire by the Amicable Contributors at Tom's Coffee

House in St Martin's Lane (1696).
The Insurance Department of the Charitable Corporation

FOR Relief of the Industrious Poor by assisting them

WITH SMALL SUMS UPON PLEDGES AT LeGAL INTEREST

(about 1708-9).
The Union or Double Hand in Hand Fire Office (1714).

Although an account of mutual fire-insurance companies would be
outside the limits of this work, it is necessary to give a brief notice of
those in existence from 1683 to 1720 so as to enable the competition, to
which the joint-stock companies were subjected, to be estimated. As
already mentioned the Friendly society was founded in 1683 under the
title of the Friendly Society for securing Houses from any considerable
loss hy Fire hy way of Subscription and Mutuall Contribution. The
controversy between this body and the Fire Office has already been
mentioned, as well as the extraordinary judgment of James 11.^
Perhaps from the point of view of finance, the most interesting matter,
connected with this undertaking, is the precise sense in which the mutual
principle was understood. Certainly, at its inception, the Friendly society
was not mutual in the signification in which this term would now be
understood ; for, during the early years of the organization, two persons —
William Hale and Henry Spelman — were described as its undertakers. It
may be gathered from the first proposals of the society that the under-
takers were to receive 1*. 4d per annum on each <i^lOO insured "as
consideration for their hazard, charge and care in executing their office 2.""
So that this type of insurance was burdened with a species of royalty to
the inventors for their '* invention " as a prior charge ; whereas, in the
joint-stock undertaking, the same class of payment was deferred, and
became contingent on there being a surplus after the satisfaction of

1 Vide supra, p. 376. 2 Relton, Fire Insurance, p. 58.

Biv. XL § 2b] Mutual Fire Societies 1696-1715 879

claims. The annual payment of 20d per cent, to Hale and Spelman
also included some recompense for the provision of security by them.
In this respect the Friendly society contended that it was superior to
the Hand in Hand (1696). Business was continuously carried on by the
older body until 1781 ; and, some time between that date and 1790, the
undertaking came to an end^

The Hand in Hand Society was founded by 100 persons under a deed
of settlement, enrolled in Chancery on November 12th, 1696, and it was
first designated as the Contributors for Insuring Homes, Chambers err
Rooms from Loss by Fire by Amicable Contribution, within the Cities of
London arid Westminster and the Liberties thereof and the places thereunto
adjoining. Soon afterwards the title was condensed into the Amicable
Contributorship at Tom^s Coffee House in St Martin\s Lane, near Charing
Cross, and about 1713-14 the name of the Hand in Hand was adopted,
which was used by the society till 1905 when it was absorbed by the
Commercial Union Assurance company Limited.

The popularity of the joint-stock form of organization after the
Revolution is shown by the reproduction of its methods by this mutual
society. Twenty directors were appointed, with minute stipulations as
to their powers, and resolutions are recorded, relative to the holding of
general meetings 2. It was also provided that a yearly dividend should
be paid from the interest on stock to the members^; and, a few years
after the foundation, it was stated that the distributions from this source
were in excess of the losses, levied on the contributors^.

When Povey's scheme for the insurance of goods ^ had proved a success,
a separate mutual society, but under the same auspices as the Hand in
Hand, was founded in 1714-15, as the Voluntary Office, Society or Mutual
Contributorship by the name or style of the Union Society for the Insurance
of Goods and Merchandizes from Loss by Fire, mithin the Cities of London
and Westminster and Bills of Mortality. Later the title was stated as
tJie Union or Double Hand in Hand Fire Office, and the management was
in the hands of twenty-four directors. This undertaking continued
to be a mutual society until 1805, when a share-capital of o^300,000 in
1,500 shares of £^Q0 each was created, and £9>0 or 10 per cent, per share
called up. In 1889 each share of .£^200 was divided into two of £\00
with £10 paid up, and at the same time ^150,000 (equal to half the
nominal capital and five times the paid up capital) was distributed as a
bonus to the shareholders from the reserve fund in the form of new shares.
The whole amount of nominal capital was made .£'450,000, which was

1 Relton, Fire Insurance, p. 68.

2 Vide summary of the deed in Reltou, Fire Insurance , p. 73.

3 lUd., p. 72. * Ibid., p. 74.
^ Vide infra, p. 381.

380 Mutual Fire Societies 1708-19 [div. xi. §2

divided into .^10 shares with ■£*4 paid. The present title of the company]
is the Union Assurance Society.

In the summary of the history of life-insurance, mention has been
made of the office, conducted by the Mercers' company ; and, in fire-
insurance, it has also been shown how the corporation of London
endeavoured to carry on this class of business. Another body which
also entered the field was that known as the Charitable Corporation,
which effected fire-insurances about 1708-9. The object of this organi-
zation was to raise a joint-stock amongst charitable persons, in order to
make loans to the industrious poor at legal interest. The idea was first
mooted about 1699 and in 1704, the promoter, William Higgs, petitioned
for a charter, stating that needy persons " were oppressed by extravagant
interest %" and on December 22nd, 1708, the members were incorporated
under the title of the Charitable Corporation for the relief of Industrious
Poor hy assisting them with small sums upon Pledges at legal Interest. The
corporation was empowered to raise a capital of not less than ^^20,000,
nor more than d^30,000, although subsequently no less than ^£^600,000
was collected. The management consisted of a committee of seven
members^. Soon after the charter had been obtained, fire-insurances
were undertaken^, but the life-policies of a Charitable Society at London
Stone were issued by a different body^.

The subsequent career of this corporation is of some interest.
Gradually the clients of the institution became, not the industrious^
but the genteel poor. Persons, whose estates were mortgaged, applied
to the Charitable Corporation, which was soon engaged in a general
financial business. More capital was required and by 1719 <^600,000
had been subscribed, in addition to which deposits were received. The
business transacted became highly speculative, and the cashier absconded
with all the realized resources of the company. It was discovered that
loans had been made upon fictitious security to favoured persons, and
that there had been many frauds in the management. The failure
occasioned widespread distress, and it was only after the estates of the
offenders had been realized that a dividend of 10*. in the £ could be
paid^.

1 State Papers, Domestic, Petition Entry Book, vii. pp. 43, 44.

2 Maitland, History of London (1754), p. 1265.

3 Relton, Fire Insurance, p. 85. * Post-boy, Aug. 3, 1710.
^ Chronicles and Characters of the Stock Ejechange, by John Francis, pp. 51-3.

Div. XI. § 2c] The Sun Fire Office 1706-9 381

C. The Exchange-House Fire Office for Town.

The Exchange-House Fire Office for the Country.
The Company of London Insurers or The Sun Fire
Office (founded 1706-8).

Charles Povey, one of the versatile projectors of the period, had the
ability to see that about 1706 the time had arrived both for extending
the principle of insurance to the country and also for the underwriting
of risks on merchandize. The latter class of business had hitherto been
considered impracticable, but Povey believed that he was able to organize
it in a manner that would be satisfactory to the holders of policies and
profitable to himself. He therefore founded two offices, the first described
as the Exchange-Hotise Fire Office for Town to insure moveables, and the
second the Exchange- House Fire Office for the Country. After investi-
gating the available evidence, Mr Relton comes to the conclusion that
the London office was planned out in 1706, and that it began business
between January and March 1708, the emblem of the sun being adopted
in the December of the same year^ Povey carried on the business as his
own private venture until October 1709. He was not long in finding
that the preliminary expense of establishing the Country undertaking
would be beyond his resources ; and so, some time after the foundation of
the London concern, he determined to work the other office by means of
a co-partnership. At first 100 persons were disposed to become share-
holders, and in November 1709 receipts were actually issued to two
persons for instalments received by Povey on their shares^. Thus in the
autumn of 1709 the position was that the London undertaking or " the
Sun '■' had been issuing policies for at least a year^ and the Country office
may have just started business, or more probably was on the eve of doing
so. During the period " the Sun " had been in existence it had had a
somewhat chequered career. The first year no claim had been made, but
soon afterwards Povey became apprehensive that the premiums might not
satisfy the liabilities which he expected to arise. According to his own
statement he had spent, in addition to the money received as premiums,
dg>l,000 out of his own resources on establishing the office, in paying
clerks and in circulating a paper called the General Remark which was
intended to advertize the undertaking.

1 Fire Insurance, pp. 262-6. Mr Relton has examined the minute books and
papers of the company, as well as the leaflets relating to it, and Povey's writings.
Copious extracts from these are given by him.

2 Ibid., p. 267.

3 The Early Days of the Sun Fire Office, by Edward Baumer, London (Sir J. Causton,
1910), p. 5.

382 The Sun Fire Office 1709-10 [div. xi. § 2

It was now the eve of the insurance-boom of 1710, and Povey wj
astute enough to take advantage of the signs of the times. While nol
despairing of the ultimate success of "the Sun," his own position, as]
proprietor, was precarious, and the Country scheme was not making the]
progress he had expected. Although a general meeting of the Exchange-}
House Fire Office for the Country had been held on May 19th, 1709, this]
appears to have been the first step in the constitution of a company. By[
a general resolution on May 26th it was proposed to unite the stocks of 1
the Town and Country undertakings. There were protracted negotiations,]
as to the terms upon which the London business should be transferred'
from Povey to the company. To secure the credit of the existing
office would involve considerable liabilities, and capital had to be pro-
vided for the Country scheme. Most of those, who had intended to
join the provincial undertaking, withdrew, and even thirteen "Acting
Members ''resigned in August 1709. It remained for twenty -four persons to
make themselves responsible for both offices, and they agreed in October
to pay Povey £¥) each, or <£960 in all, for the goodwill of the London
business, as well as an annuity of <£*400 a year during the lives of Povey
and his wife. In the month of November something happened, which
led the company to endeavour to obtain better terms from Povey.
Probably in the interval a serious fire had occurred, involving heavy
losses. The company was apprehensive of additional claims, and Povey
was determined to escape further liability "lest another conflagration
too heavy to bear might happen." In March 1710 a deed, embodying a
new agreement was executed, under which the payment was reduced to
£9^0 by each of the twenty-four members of the company, and the
annuity to Povey was to be 10 per cent, of the profits but never to
exceed ,£200, whatever the profits were. It was also agreed that the
receipts of Povey for any payments, made to him by the members on
account of shares in the Country scheme, should be accepted as if they
had been acknowledgments of instalments of the £9.0. On the signature
of this document, Povey handed over the balance of premiums remaining
in his hands, which amounted to £\5 only.

It would seem that the company had dealt hardly with the founder
of the concern, in repudiating the first contract and cutting down the
payment in cash, as well as the annuity, by one-half. Had there been
nothing concealed on Povey's side or nothing to change the valuation of
the property he transferred, he could have held the purchasers to the
original bargain. Povey 's own language suggests that, after the signature
of the contract of October 1709, there may have been serious claims on
account of losses, and it may have been that he had not fully informed
the purchasers of the liability. It is possible that the members of the
company had to pay these losses, since Povey was not in a position to

Div. XL § 2 c] The Sun Fire Office 1710 383

do it. Therefore on this hypothesis it would follow that, although
Povey only received £9>0 from each of the twenty-four shareholders,
this amount, together with the call on account of the fires about
November 1709, made the business cost them as much or more, than if
they had purchased under the first agreement without paying such
losses. It may appear that this statement of the position depends upon
too many hypothetical elements, but it is confirmed in a remarkable
manner by a passage in Povey's will, which is prefaced by a solemn
appeal " to the great God, who knoweth the secrets of all hearts,'' and
may therefore perhaps be accepted with more credence than most of his
statements relating to " the Sun."*' He there states that " when the
undertaking of the Sun Fire Office was by me assigned over to them
[i.e. company], the original charge never laid them in One Thousand
Pounds ^" Since this passage is introduced to show the contrast between
" the great estate '' of the company and the small sum paid the founder,
there would be no reason for overstating the original outlay of the
twenty-four. If then, their whole payment had been i^20 each at this date
" the original charge '' would have been ^"480, and Povey would almost
certainly have said that "it was under c£500" instead of under ^£^1,000.
Elsewhere he is very minute in showing how by receiving only this ,i?480 he
sustained a loss of ^520 of the c£l,000 he had expended in starting the
business, so that it seems reasonable to conclude that, in addition to £20
paid Povey by each of the members, they also had to make good claims
on policies underwritten by Povey. Should a payment of £20 by each
member have been necessary, this would account for the reduction of the
sums, promised to Povey, by that amount. If this was so, the capital in
1709-10 was about .^960, of which <£480 was certainly paid to the
founder. Additional confirmation is obtainable from a close considera-
tion of the documentary evidence. In the deed of partnership the call
of £20 is expressly stated to have been " for the better maintaining and
carrying on and establishing the office upon a lasting and sure founda-
tion." This payment was agreed to after the signature of the document.
But, in it, mention is made of " several sums of money paid to Chai-les
Povey," which were plainly additional to the call. It follows, then,
that besides the ^£480 called up, there were further outlays by the shaie-
holders^

As soon as possible after the signature of the final agreement with
Povey, a deed of co-partnership was executed. This instrument which
is dated April 7th, 1710, describes the members as the Covipamj of
London Insurers for the better maintaimfig and carripng on of the Sun
Fire Office. It was agreed that the company should never consist of

1 Relton, Fire Insurance, p. 588.

2 Baumerj The Early Days of the Sun Fire (>ffice, pp. 12, 13, 10.

384 The Sun Fire Office 1710-15 [div. xi. § 2d

more than twenty-four distinct persons, of whom seven should form a]
committee. Losses were to be borne equally by the members, share and
share alike, and the committee had power to make calls, as required.
Members must be insurers. In the case of any share becoming vested
in a female, or an infant, a person might be deputed to act as a proxy.

After the transfer of the two offices to the company, business was
prosecuted briskly. As early as the first year, under the new manage-
ment, agents were appointed in the country, and vigorous efforts were
made to draw attention to advantages offered by the insurance of goods.
From 1710 to 1715 the method adopted was similar to that of the life-
companies, several of which had been in existence for some time. Out
of the quarterly payments, received as premiums, a sum was to be
lodged in the Bank, sufficient "according to an accurate computation"
to make good each claim. When the quarter was ended the balance,
after paying losses, remained for reserve and profit. If however the
sum, set aside out of the premiums, did not suffice to make good the
whole claims, then the claimants were to participate rateably in pro-
portion to the amounts for which they were each insured. In 1715 or ^_
1716 this limitation of the liability of the office was withdrawn. fl

" The company preserved no records of monetary transactions until
many years after its establishment,*" although the minutes are extant ^
But, while there is no precise information as to the progress of the
company for some years after its foundation, there are several indi-
cations that tend to throw some light on the general condition of its
finances. In December 1713 the first dividend was declared, and in the
same year shares were sold at £QQ and 60 guineas. If, as conjectured
above, the original payments made by the members were ^40 each ; and,
if as is not improbable, some further calls had been made between 1710
and 1713 this price would mean that the shares were about par or even
commanded a small premium. If, on the other hand, no more had
been called up than the £9>0 per share, paid to Povey, the price of £60
would represent a premium of 200 per cent. The business appears to
have been successful up to 1715, when a succession of "dreadful"" fires
involved claims in excess of the premiums and the shareholders had to
pay " several hundreds pounds "''* each to make good the deficiency. At
the same time " they resolved to raise a sufficient fund to answer all
claims for loss, and they made arrangements for the payment of further
sums by themselves or by others on their behalf for supporting the
office and securing the insured ^.^^ The increased sums paid on the shares
are reflected in a quotation of 175 guineas in 1714, as compared with

1 Relton, Fire Insurance , pp. 282-3; copious extracts and facsimiles are given
by Baumer in The Early Days of the Sun Fire Office,

2 Relton, Fire Insurance, p. 280.

Div. XL § 2c] The Sun Fire Office 1715-20 385

one of ^^500 in 1715, both being for a single share. After the im-
portant calls of 1715, it is recorded that the business was much improved,
and that the office had gained reputation, not only in London, but also
in diverse places both " in South and North Britain." Probably for
over ten years no further serious calls were made ; and, supposing the
price of shares in 1715 was about par, this would give a called up
capital at that date of ^12,000. Thus after 1715 the company was
well established ; and a steady, if moderate, profit was made. Divi-
dends were resumed— one paid in 1718 was 10 guineas— and the general
condition of the undertaking was prosperous. Early in 1720 Povey
was offered ^400 for his half-shareS which it appears he accepted, and
later in the year an offer of 1,000 guineas for a whole share was refused.
These prices of course are to be accepted as subject to the general
tendency towards inflation of the period.

Some further information on the finances of the company may be
gained from various utterances of Povey. It has been shown that he
had sold the London undertaking for i*480 in cash and an annuity of
10 per cent, of the profits, with the proviso that this payment was not
to exceed ^^200 in any one year. At first the profits did not suffice to
afford him =£^200 a year, and he claimed that his annuity was cumula-
tive, that is, that when the business improved, the arrears of previous
years should be made good. In his frequent statements of his claim,
he gives some information as to what the profits were. In his English
Memorial he stated that, calculating on this basis, the company owed
him d^l,3002. This deficiency of the annuity below .fi'gOO a year may be
taken to have occurred up to 1720, since after that date the profits were
considerable. Besides, Povey records that during the first ten or twelve
years the undertaking "did little more than answer its own charge.*"
Bearing in mind that he sold his half-share in 1720 (although subse-
quently he was a shareholder for a brief period) his comparatively exact
knowledge of the financial position would thus end with the accounts of
1719, and it would be twelve years from the beginning of business to
the commencement of 1720 or ten years from the foundation of the
company. Therefore, supposing Povey to have had in mind the results

1 Mr Relton seems to find some difficulty in interpreting the position of Povey
relative to this holding. In one place he says Povey was half-sharer, and therefore
his lien on the profits, after payment of his annuity, would have been a half : but
there is no mention of any such proposal. It is to be remembered that in almost
all early companies, where the shares were of large amount and of a fixed number,
these became divided into fractional parts, e.g. the New River, the Mines Royal,
the Mineral and Battery Works, the Virginia company. It is not unlikely that
the committee, in endeavouring to satisfy Povey, assigned him a half-share which he
appears to have sold in 1720.

^ Relton, Fire Insurance, p. 284.
s. c. III. 25

386 The Sun Fire Office 1715-20 [mv. xi. § 2 c

during the period up to the end of 1719, and also that he elsewhere
alludes to the very prosperous condition of the concern in 1720 and
afterwards, the period in which the agreed upon 10 per cent, of the
profits was below £^00 a year may be taken to end in 1719. The total
amount of the deficiency was ^1,300, therefore the amount paid, during
these ten years, was =£^700. Therefore again, the minimum amount of
profit^ (subject to Povey's 10 per cent.) in this time was <^7,000 or an
average of £100 a year. Needless to say the amount in the first years
would have been less. It is almost certain that in 1715 no profit was
made, but subsequently the business improved, and in the last year the
balance may haye been about J^2,000. This estimate is confirmed by
the fact that in the English Inquisition (1718) Povey says that the
profit of the company was then £W0 or .£^800 a year^. This would
probably apply to the accounts of the previous year. Now, supposing
that the capital at this time was <£*1 2,000, at which sum the value of
the undertaking might be estimated according to the recorded price of a
share in 1715, and that one takes the average of the two sums given by
Povey, i.e. ^700, after allowing for his 10 per cent., there would remain
a sum only sufficient to provide a yield of 5\ per cent, without any con-
tribution to reserve. If the dividend of 10 guineas for that year was
the only one, the yield would have been as low as 2^ per cent, on the
price of 1715.

The fateful year 1720 left its mark often for evil, sometimes for
good, on all the companies which survived that period of excitement.
The Sun was no exception. It was deeply concerned by the many rival
promotions of the period, and on February 24th a committee of five
was appointed to take care of its interests I Subsequently there was an
obscure transaction with the Royal Lustring company*. Povey in the
Secret History of the Sun Fire Office records that the committee joined
Avith the Lustring company, " which raised their shares to a very high
advance, and all in the secret sold at a great price ^. Soon afterwards
the office gave out that they had broken with the Lustring company,
and then Lustring shares fell to nothing. "'"' Mr Relton is of opinioi

1 Provided that there was no year later than 1719 in which there was a deficiency^
This is a minimum estimate, since it is possible that there may have been a year ii
which the profit was over £2,000.

2 Relton, Fire Insurance, p. 494.

3 Extract from the Minutes, quoted Relton, Fire Insurance, p. 283.
* For an account of this undertaking vide supra, pp. 73-88.
^ For the prices of Lustring shares up to 1708 vide supra, p. 89; Andersoi

records that in 1720 the new shares, £5. '2s. Hrf. paid, rose to 120 (Annals
Commerce (1790), iii. p. 389) ; The Bubbler's Mirror gives the highest price as 105j|
and differs from Anderson in saying that the new shares were £5 nominal with'
2*. M. paid.

Div. XL § 2 c] The Sim Fh^ Office 1720 387

that, since there is no record of such a transaction during the Parlia-
mentary enquiry of 1720, and that the case where a proposed insurance
company had "been up and down about buying the charter^" was
investigated, it may not have been impossible that the Sun speculated in
the shares of the Lustring company and that Povey's assertion must be
discredited 2. It must however be remembered that the enquiry took
place in February 1720, and that the celebrated writ of scire facias was
not issued till August. Thus there were six months in which such
negotiations might have taken place. Besides, there were very brisk
dealings in derelict charters. There was an impression that companies,
acting without a charter, were in danger of being suspended. It
was difficult to obtain one, and therefore in some cases a company
bought up the needed document from the creditors of another under-
taking, which had come to grief. Thus businesses were carried on under
a title widely different from the transactions in which they were engaged.
The Society of Mines Royal in 1720 was a marine insurance under-
taking^, the Sword Blade company '' was a bank and so on. Now the
legal position of the Sun insurance company was unsatisfactory. It was
acting in a corporate character, without any authorization from the
State, and therefore it appears highly probable that the committee may
have taken steps to purchase the Lustring charter. The fall in the
shares of the latter is to be attributed to the writ of scire facias.

During the same period there appears to have been some movement
towards a "community of interest"''' between the Sun and the Royal
Exchange companies, based on a purchase of a considerable proportion
of the shares of the former in the interests of the latter. Probably the
financial troubles of the Royal Exchange company precluded the con-
summation of the scheme, and the transfer of a part of the shares was
not completed until 1725^

In 1720, as has already been mentioned, an offer of 1,000 guineas
for a share had been refused, and later in the same year the transaction
on behalf of the Royal Exchange was at d^l,500 each. Soon afterwards
the company divided every share into 100 parts, and so the capital now
consisted of 2,400 shares instead of 24. These shares were sold on the
market during the boom at ^20 each (this would have represented a
quotation of .g'2,000 for the old shares), but in 1723 the price was ^10,
thus repeating that current before the inflation^.

^ Jmirnals of the House of Commons, xix. p. »348.

'^ Relton^ Fire Insurajice, p. 285.

^ Vide supra, ii. p. 405, infra, Section 4.

* Vide infra. Division xii., Section 3 c.

^ Relton, Fire Insurance, p. 288.

6 I.e., 24 shares at 1,000- £24,000; 2,400 shares at 10 = £24,000.

25—2

388 The Sun Fire Office 1720-1892 [div. xi. § 2

At this time the company appears to have taken the par as beinj
^10 for the shares in their new form. This is shown by the transactions
of 1720 and 1726-8. In the former year the old company sold to the
new one all the shares, not set aside under the arrangement with the
Royal Exchange at J*1,()00 per old share, and some of these were sold
by the company as new shares at d^20. In 1726 a call of =^5 was
made. Then in 1728, 2,400 additional shares were issued upon which
£\b was called up. So that, if the new shares of 1720 were taken as
being ^10 paid, this would make both classes of shares £\5 paid. Sub-
sequently, there have been very large returns of capital made to the
shareholders, so that the subscribed capital has been repaid and that at
present existing is derived from, accumulated profits, which had been
carried to the reserve fund. Up to January 1892 the capital consisted
of the 4,800 shares, into which it had been divided in 1728, and it was
arranged that each shareholder should receive fifty new shares of £\0
each credited with IOa*. paid, in exchange for every share of the
issue of 1728.

SECTION III. UNDERTAKINGS FOR INSURANCE
RELATIVE TO LIFE-CONTINGENCIES.

A. The Society op Assurance for Widows and
Orphans (1699).

It has already been shown that, although the insurance of life-
contingencies was earlier than that against fire, the latter was carried
on by companies at an earlier period than the former^ This may be
accounted for in part by the attention directed towards the need for
fire-insurance by the Great Fire of London, and in part by the varying
nature of the life-contingencies for which provision required to be made.
The issue of state-loans early in the reign of William III. in the form of
annuities for lives, no doubt directed attention towards this species of
income, and the first recorded movement on a large scale was that of the
Mercers' company, already mentioned 2, which differed from the scheme
of the annuities of the government, since the latter were given for a
single capital payment, whereas the scheme of the Mercers' company
provided for periodic payments during the life of those who wished to
provide an annuity for their successors^.

In 1699, according to the account of the members, a joint-stock
company was formed by ten persons under the title of the Society of
Assurance for Widows and Orphans*, but in 1698 an undertaking,
with the same name, was in existence inviting people to join it. The
business was conducted under a kind of tontine system. There were to be
2,000 subscribers, and, on the death of any one of them, the others were

1 Vide supra, p. 373. ^ ^ide supra, p. 368.

3 About 1697, according to a petition of James Isaacson and three others, dated
July 4, 1698, a new undertaking had been invented '' for supplying the defects of
jointures by a mutual contribution/' which secured the widow a single payment of
£600 or an annuity of £50, which was entitled The Friendly Society of the Joint Stock
of Assurance for Widows— StsLie Papers, Domestic, Petition Entry Book, iv. p. 239.

* Ibid., Petition Entry Book, xii. p. 289. In a copy of The Proposals of the

Friendly Society for Widows fBrit. Mus. — 'J^' '* i» 'sUXeA that this office was
opened November 27, 1696.

390 Life Insurance Companies [div. xi. §3 a

to pay 5s. each. Out of , the sums thus received the widow of the!
deceased was to receive £B00^. In 1703 a second society was formec
which was intended to consist of 100 subscribers^. Ten years later the
business had fallen into difficulties. For a number of years all claims-
had been met, until Robert Barrington, the master of the society, hadl
absconded with its funds, and had brought it into disrepute. As a
result, it had been necessary to dissolve the undertaking, and on
July 13th, 1713, several persons petitioned for a charter in order to
revive it. They proposed that the new society should be limited to
2,000 persons, and that the stock should not be more than d£^2,000 at
any one time^. It is probable that, in view of the proceedings of the!
marriage-societies of 1710, this petition was not granted and that the
business was not re-started.

B. The Proprietors of the Traders' Exchanoe House
Office for Lives (1706-7).
The Amicable Society for a Perpetual Insurance
Office (1706).

These two undertakings, both of which were founded in the year
1706, were organized in a manner similar to the society of Assurance
for Widows and Orphans. The Traders' Eocchange House Office was
founded by Charles Povey, and the subscribers were to be 4,000 reputed
healthy persons between the ages of 6 and 55 years. Each subscriber
was to pay 9.s. 6d. per quarter ; and, at the end of every quarter, ^^300
was to be divided amongst the representatives of the membei-s or their
nominees, who had died in that quarter. It soon became manifest that
many members had insured very bad lives, and therefore it is not a
matter for surprise that this undertaking came to an end about 1710^.

In the same year in which Povey \s company was formed (1706)
there was established th£ Amicable Society for a Perpetual Assurance
Office. This organization was the first of the insurance undertakings
to obtain a charter of incorporation which was dated July 25th, 1706.
This instrument, besides gi'anting the usual privileges of perpetual
succession, the owning of lands and use of a common seal, constituted
a body of twelve directors to manage the business, and gave minute
directions how it was to be conducted. The subscribers were to be
members of the society and they were never to exceed 2,000 in number.
Each of the first 2,000 members was to pay 6s. towards " the joint -stock,'

1 The Postman, No. 525, Oct. 11, 1698.

2 London Gazette, No. 3883, Jan. 25, 1703.
^ State Papers, Domestic, Petition Entry Book, xii. p. 289.
* Helton, Fire Insurance, p. 514.

Div. XL § 3 b] The Amicable Society 1706-1866 391

as entrance-money' ; and, in addition, £Q. 4*. per annum as a premium
during the continuance of the life assured. The first year one-sixth of
the premiums received was to be divided amongst those entitled to claim,
<£^4,000 in the second year, J*6,000 in the third, ^8,000 in the fourth and
^10,000 (or as much as might be decided on in a general meeting) in the
fifth and subsequent years. If the full 2,000 members did not join these
sums divisible were to be proportionately reduced^.

In the year 1706, 875 persons had joined and the amount divided
gave each claimant £Q0. %s. 9(/. In 1707 the number was complete, and
<s^41. \^s. 4 J. was paid in each case ; this division had risen to nearly £^^
in 1710^

This society was thoroughly mutual, unlike some others which, while
professing to be friendly, were in reality the proprietary ventures of one
or more persons. However, it is not so much to this characteristic as to
a better scrutiny of nominated lives that the continued existence of this
society is to be ascribed. Besides, it diifered from other life-insurance
ventures in requiring a much larger premium and in paying larger sums,
so that there was every inducement to exercise greater care. It is
perhaps no small tribute to the ability of the early management that
it was able to keep the undertaking in existence, when so little was
known of the principles upon which this class of business should be
conducted. The Amicable society continued to transact an extensive
business until 1866, when it was absorbed by the Norwich Union life
insurance society*.

C. The various Societies for Insurance on Life-

CONTINaENCIES OF THE YbAR 1710.

It was not long before it was recognized that the system, adopted by
the three undertakings already mentioned, could be utilized in providing
against other contingencies than death. Indeed the prevalence of the
custom of effecting an insurance on the life of some nominee tended both
to introduce a speculative, rather than a provident element, and also to
suggest that many other events might be assured for or against by the
same method. Thus it came about that towards the end of 1709 and
during the year 1710, there were very many so-called insurance societies
formed. A few of these aimed at providing a sum of money to be paid
to the insurer on the death of his nominee, but most of them were

1 Subsequent subscribers paid \0s.

" The Charter of the Corporation of the Amicable Society, London, 1710.
•^ Ibid., pp. i, ii.

* For the further history of tlie Amicable society see \Valford, Imuratice
Cyclopedia, i. pp. 74-87.

892

Life Insurance Companies [wv. xi. §

i3ci

occupied with the contingencies of marriage and birth, while a few
proposed to enable apprentices to have a small amount of capital on
setting up for themselves. Apparently, no schemes could have been o;
a more provident nature, but there were certain elements which diverted
the movement from being one of thrift towards something more akin to
gambling. Allusion has already been made^, in the case of life-insurance a
proper, to the practice of registering a life other than that of the person ^
paying the premium. When the premium was the same, whatever the
age of the accepted life, it was to the interest of the policy-holder to«
insure the worst life the office would accept. Now in the " insurances *^
on marriages, there was the same custom of entering nominees; and,
under the conditions on which the societies were formed, it was possible
for anyone, who made a study of the conditions, to benefit dispropor-
tionately to the detriment of the hona-fide provident members. Besides,
there were great temptations to fraud on the part of the managers of the
offices, and many indications show that an honestly conducted insurance
society was the exception rather than the rule in 1710-11 — for instance
Dorothy Petty attributes the success of the undertaking of which she was
a director (one of the Union societies) to the fairness of her transactions ^
The most remarkable characteristic of the whole movement is the
extraordinary number of societies founded from 1709-11, some idea of
which may be gathered from the following list, which, however, does not
claim to be exhaustive'.

Name

Nature of Insurance

The Amicable and Most Beneficial Society, 12 Bell Court,

Cheapside*.
Bee-Hive Society, at the Golden Beehive, Strand.

Beneficial Society, Flying Horse, near RatclifFe Highway.
Original Beneficial Society, Swan Yard, Strand.

Bunch of Grapes Office.

Company of Advantageous Insurers.

Safest and Most Advantageous Office, at the Carved Porter,

near the Guildhall.
Fair Society, at the Bunch of Grapes, Fleet St.
The Faithful Office, kept by the Widow Pratt, near the

Guildhall.

Marriage

Marriage and
Births, also
non-marriage

Marriage

Marriage and
Births

Marriage and

Servants
Marriage

1 Vide supra, p. 371.

^ The Petition of Dorothy Petty, quoted by Cunningham, Growth of English Industry
and Commerce in Modem Times, p. 491 (note).

» Taken from the Collection of Proposals [Brit. Mus. 1890, b, 5, 816 . m . 10] and
the advertisements in the newspapers.

* Marriages in the Fleet, Ludgate or Queen's Bench were excluded.

Biv. XI. § 3c] Marriage Insurance Societies 1709-12 393

Fleur de Luce Society, at Lyon's Inn.

Old Office of Insuring Marriages at a certain and weekly

dividend_, at the Fleur de Luce, St Clements.
Friendly Society, at the Black Swan, Shoreditch.
Generous Society, at Templeman's Coffee House, Strand.
Generous and Amicable Societies, at Widow Pratt's Coffee

House.
Good and Friendly Society.
Hand and Heart Society, New St.
Hereditary Society.
Honorable and Volontary Societies, at Hurt's Coffee House,

Strand.
The Hudson's Bay Company, at Hudson's Bay House, Fen-
church St.
Just and Amicable Societies, at Widow Pratt's Coffee House.
Liberal Society, at Hargreave's Coffee House without Bishop's

Gate.
London Charitable Society, at Paternoster Row.
Monthly Society of Assurance on Lives, Bedford Court,

Covent Garden.
Office of Insurance on Lives, at the Rainbow Coffee House,

Cornhill.
Office of Insurance on Marriages, —
at Bell Court, Fleet Street,
in King's Head Court, Petticoat Lane.
at St Martin's Court.

over against St Olave's Church, Southwark.
at Mr Hargreave's Coffee House,
at The Cow's Face, Crooked Lane,
at Bolt Court,
kept by Mr Simpson, Goldsmith, at Fountain Court,

Strand,
kept by Mr Gray, Glazier, at Swan Yard, opposite

Somerset House,
at the Bunch of Grapes,
at Bangor Court, St Andrew's Church.
Only Lawful and Perpetual Office, at London Stone, of the

Charitable Society of single persons.
Original Loyal Society, at the Spur Inn, Southwark.
Loyal Society, Red Lyon, Minories.
The Loyal Societies.

Loyal United Society, at Bounce's Coffee House.
Newest and Best Society, at Dean's Head, St Martin's le

Grand.
Noble and Honest Society, at the Sign of the Vine, Newgate St.
Nuptial Office, at Pilkin's Coffee House, Clerkenwell Close.
Original and Beneficial Society, at the Swan, Strand,
Perpetual Insurance Office, at the Sign of the City of Bristol,

St Catharine's.
Political Society, Bolt Court, Fleet St.
The Profitable Society, at the Wheat Sheaf.
Profitable and Equitable Society, at the Fleur de Luce.
Profitable and most Equitable Society, at the Tin-shop,

Newgate St.
Second Profitable Society, Palsgrave, near Temple-Bar.
Political Society, at Finch Lane.
Royal British Society, next door to Fountain Tavern, Strand.

Marriage

J}
Children
Lives

Apprentices

Servants
Marriage

Lives

Marriage
)>
})
a

Children
Marriage

394

Life Insurance Companies [div. xi. § 3

Name

Safe Society, at the Old Plough, Strand.

Secure Society — Hand and Glove, Great Russell St., Covent

Garden.
Secure Society, at the Sheep and Fox, Strand.
Society of Mutual Contributors, Ironmongers' Lane, Cheapside.
Society without Loss, Little Piazza, Covent Garden.
Substantial and Profitable Society, St Olave's, Southwark.
Substantial Society for the Public Good, at St Lawrence's Lane.
True British Societies, Vine St., St Michael, Crooked Lane.
Undoubted Profitable Society, at the Sign of the Ship, Strand.

Undoubted and Profitable Society, at the King's Head, St

Clement's Court.
Union Society, at the Black Lion, Drury Lane.
Union Society, at the White Lion by Temple Bar^.
Union Society, at the Cheshire Cheese, Whitechapel.
Union Office, Bishopsgate.

United Amicable Society, at the Pennsylvania Coffee House.
United Company of Insurers, at the Green Lamp, Downing St.
United Generous Societies, at the London Coffee House,

Threadneedle St.
Unquestionable Society, White Lion, King St., near the

Guildhall.
Utible Society " next door the Blue Boar and opposite the

Half Moon Tavern," Aldersgate St.

Nature of Insurance

Marriage

Marriage and

children
Marriage

Lives and children

Marriage and ■
apprenticeship ■

D. The Company of London Insurers upon Lives (1709).

In contradistinction to the ephemeral so-called mutual societies from
1709 to 1711, there was a company, formed in the former year, which
survived the insurance boom of this period. It was incorporated by
charter in April 1709, and the members were empowered to elect twelve
directors, who chose a chairman from amongst themselves. The quorum
at a court of directors was seven, and at a general court it was twenty.
Each member had one vote for every share, and at all meetings the
chairman had both a deliberative and, in the case of equality, a casting
vote. It was also provided that the company might increase or lessen its
capital, always provided that sufficient assets remained "to answer all
policies and contingencies thereon ^*"

In 1714 this company^ prepared a very elaborate set of proposals

1 It is to this Society that the petition of Dorothy Petty relates.

2 Harl. MS. 2263, ff. 213, 214.

3 It is possible that these J)roposals may have emanated from a different company
from that which received a charter in 1709. The title of the latter was "the
Company of Insurers upon Lives," whereas tlie body, from which the proposals
emanated, was called "The Company of London Insurers."

Div. XI. § 3d] Company of Insurers iipon Lives 1709 395

which was prefaced by the statement that "wise men do look upon
projects of this nature with caution at a distance before they engage in
them,'"* therefore very elaborate financial details are given. The method
adopted was the same in principle as that of the Amicable, but it differed
in the application. The payment of premiums was to continue for ten
years only, during which time each member (who survived) would have
paid ofi^ll. 19^. 4JcZ. The total premiums were to bring in an income of
<i£'8,000^, and every second year a division was to be made amongst the
claimants, amounting to <i^5,000 in 1716, and subsequently to .£'6,000
in the later years. It will thus be seen that the amount divisible was
considerably less than that received; and, in addition, interest on the
surplus at 6 per cent, went to increase the capital. Therefore, at the end
of the tenth year, after paying all claims, the company would have
accumulated funds of over <£86,000, which would suffice to meet all
demands without additional payments by the members 2.

^ No informatiou is given as to how the loss of premium through deaths was to
be made good.

- Proposals of the Company of London Insurers [Brit. Mus. 8225 . e . ol].

SECTION IV. MARINE INSURANCE COMPANIES.

The Undertaking for insuring Ships and Merchandize
AT Sea (1717).

The Undertaking kept at the Royal Exchange for
INSURING Ships and Merchandize at Sea (1717) ; or
The Mercers' Hall Marine Company.

The Governors, Assistants and Societies of the City of
London of and for the Mines Royal, the Mineral
AND Battery Works and for assuring Ships and
Merchandize (1718); or The Old Insurance: or
Onslow's Insurance, incorporated (1720) as The
Royal Exchange Assurance.

Colebrook's Insurance (1719).

Ram's Insurance (1719).

Ram and Colebrook's Insurance (1719) ; or Chetwynd's
Insurance, incorporated (1720) as The London As-
surance.

Though marine insurance was developed by joint-stock enterprize
later than fire or life risks, this delay was atoned for by the great amount
of attention concentrated on this class of business once it began to
attract promoters. The circumstances which attended the entrance of
the joint-stock type of organization into this field are very complex, but
are of great interest, since they resulted, but by somewhat devious ways,
in the incorporation of the Royal Exchange and London corporations,
which still exist.

The commencement of the movement is to be found in 1717. At
that date Sir Justus Beck, Sir Alexander Cairnes, with many others,
projected an Undertaking for himiring Ships and Merchandize at Sea ;
and, on March 14th of that year, lists were opened for subscriptions of

Div. XI. § 4] Maritie Insurance Promotions 1717-18 397

d£*l, 000,000 ^ In the summer a rival scheme was propounded by Case
Billingsley, a solicitor interested in financial ventures, who had an office
in the Royal Exchange. The lists were opened about August 12th,
1717, for a subscription of .£'1,000,000 and not exceeding ^%000,000,
and were closed on January 16th, 1718. This undertaking was described
sometimes as the Mercers' Hall Marine company, or the Undertaking
kept at the Royal Exchange for insuring Ships and Merchandize at Sea^.

The former of these two undertakings presented a petition, praying
for a charter, which, by an order in Council, was referred to the Attorney-
General on February 2nd, 1718^ At the same time two counter
];)etitions, the one from 370 merchants of London and the other from
Bristol, were considered. The report on these was issued on March 12th.
The Attorney-General stated that there was no joint-stock body in
Europe for this purpose*, adding that "the making of an experiment in
a thing of this nature, if it should prove amiss, would be of the utmost
consequence to the trade of this nation," and therefore he refrained from
advising the incorporation asked for.

Thus in the summer of 1718 both schemes were at a standstill.
Some expenditure had been incurred by each company, a part of which,
having been paid in " fees " to the Attorney-General, formed the subject
of a subsequent Parliamentary enquiry^. In the course of the hearings,
it had been stated that to carry on business a charter was required ; and,
on the appearance of the adverse report, Loid Onslow who was a
member of the Mercers' Hall Marine company was acute enough to see
how the legal difficulty might be surmounted. He appeals to have been
connected with the Elizabethan societies of the Mines Royal and the
Mineral and Battery Works ^ and the idea suggested itself to him or to
Case Billingsley'' that, if the charters of these were purchased, marine
insurance could be carried on under them. It was felt, too, that there
would be additional opposition, if the supporters of the other proposed
company were excluded from the benefit of these grants, and therefore

1 Special Report of the Committee appointed to enquire into and Examine the several
mbscriptions for Fisheries, Insurances and Annuities for Lives, London, 1720: Journals
of the House of Commons, xix. p. 344.

2 A List of the Names of the subscribers for raising the iSumme of one million sterling
as a Fund for Insuring ships and Merchandize at Sea [1718], Brit. Mus. 8225 . a . 38 ;
Relton, Fire Insurance, p. 153.

3 Journals of the House of Commons, xix. p. 344.

'* It is recorded, however, that a joint-stock marine insurance company had been
established in France as early as 1664— Ze Capital, la Speculation et la Finance au
XIX^ Siecle, par Claudio Jannet, Paris, 1892, p. 161.

^ Journals of the House of Commons, xix. pp. 308-10.

® For an account of these cide supi'a, ii. pp. 383-405, 413-29.

7 In the case of the York Buildings company (Division xii., t>ection 'l) it ua>
Billingsley who effected the transfer from the old to the new company.

398 Marine Insurance Companies [div. xi. § 4

it was decided to give those, who had joined either of the undertakings
of 1717, an opportunity of becoming members of the new body\ The
list was completed on August 27th, 1718, and the whole amount of
stock taken up was .^1,152,000. On this nominal capital only J per
cent, had been called up by January 28th, 1719, and on February 26th a
further 5 per cent, had been paid m\ Though these calls provided
£60,4}80^ this sum was not all available for purposes of marine under-
writing. In order to obtain control of the charters of the Mines Royal
and Mineral and Battery Works it had been necessary to purchase 124 -
shares in these societies at a cost of d^2,904. 14?. The remaining share- I
holders in the Elizabethan bodies elected to exchange their shares in
these as against an equivalent amount of stock in the insurance com-
pany^. By this operation the members of the latter, who numbered
400, believed themselves legally entitled to start marine underwriting
under the style of the Governors, Assistants and Societies of the City of
London of and for the Mines Royal, the Mineral and Battery Works and
for assuring Ships and Merchandize*. M

On March 3rd, 1719, it was announced that business would be begun m
at the office of the company "in the Royal Exchange^.*" Thereupon
the opponents of the new departure again petitioned, stating that the
charters, under which insurances were being effected, had been originally
gi-anted for other purposes, and it was asked that they should " be set
aside ^.'' The company replied, and on May 9th the Attorney-General
reported that the use made of the charters was unwarrantable, adding
that the design appeared to have been to use these grants " as an ex-
periment in the insuring of ships by a corporation''.''' This report

1 There has been some doubt as to the relations of these three proposed companies
at this time, but the following passage makes it clear : '' Notwithstanding the said
reports \i.e. of the Attorney-General and of the Solicitor-General] all the old
subscribers signed a new subscription," Journals of the House of Commons, xix.
p. 345.

2 Vide infra, Summary of Capital^ A, p. 410.

3 Journals of the House of Commons, xix. p. 344.

'* This title^ without the last clause, was that of the charters of James I.

Frequently the company used an abbreviated form, as for instance in the following :

Reasons humbly offered by the Societies of the Mines Royal, Mineral and Battery Works

who insure Ships and Merchandize with the Security of a deposited Joint-Stock

To .. A^r 816. m. 10"!
I Brit. Mus. fiY" J-

5 Daily Courant, March 3, 1719.

^ Reasons humbly offered against the Societies of the Mines RoyaJ,, Mineral and
Battery Works who ham undertaken to insure Ships and Merchandize at Sea without a

[357 b 3~l
Brit. Mus. ^^^ — ; Office-keepers Answer to a Scandalous Refection on

them by the Societies of the Mines Royal, Mineral and Battery Works.
^ Journals of the House of Commons, xix. p. 345.

Div. XI. §4] Schemes of Ram and Colebrook 1719 399

further states that the erection of such a body would require mature
deliberation. Though the opinion of the law-officers was not favourable
to the undertaking, it continued to transact business, and by July 31st
a further 4f per cent, had been called up on the stock making 10 per
cent, in all and amounting to ^6^115,200^. The business transacted was
considerable — early in 1720 policies had been underwritten to the sum
of \\ millions^, while the total insured from April 1719 to December
of the same year is stated to have been two millions I It was believed that
the risks underwritten had left a satisfactory balance in favour of the
company, and, in October or November 1719, a dividend was declared^
Such success drew attention to the prospects of the undertaking, and
the stock was quoted at 15f (for c^lO per cent, paid up) " without the
dividend" by Freke on November 1st, under the title of "insurance
stock on ships." The price advanced till 18 was touched on the 23rd,
after which there was a slight relapse, owing to the floatation of the
rival schemes of Ram and Colebrook, and at the end of December the
shares fluctuated from 16 to 16|. At this time the company had con-
siderable resources in hand, since it sold out <i^4,500 India stock on
October 6th, £9.00 more on December 15th and <£2,400 on February
11th, 1720. These sales of £1,\00 India stock realized, at the respec-
tive market-prices, about d^l 3,050°. It may be conjectured that this
realization of investments was not to pay losses, but for the purpose of
purchasing South Sea stock, which was just beginning to advance.

The promotion of other marine insurance companies in November
and December was one of the first signs of the boom of 1719-20.
The first of these to appeal to the public were those already mentioned
and identified with the names of Ram and Colebrook, each of which
had a proposed capital of about a million ^ The initial stage of the
floatation was reached in November, when "permits" were issued, in
each case for 9s. 6d., which entitled the holder to the allotment of X^lOO
of stock. After some negotiation, it was decided to amalgamate the
two ventures with a nominal capital of ^2,000,000, in which <£'2,000

1 Vide infra, Summary of Capital, A, p. 410.

2 Jov/rnals of the House of Commons , xix. p. 344.

^ The Royal Exchange Assurance, an Historical Sketch, [by W. N. Whyiuper],
1896, p. 9.

4 Mr Whymper, the present secretary of the corporation, informs me that nearly
all the early records were burnt in the fire at the Royal Exchange in 1838, and those
that were saved give no information as to the early finances of the company.
Therefore it has been impossible to recover the amount of this dividend.

^ Court Book of the East India company, xlviii., ff. 443, 513. These transfers
are recorded through their being executed under power of attorney. No books
giving transfers of South Sea stock are discoverable.

" Vide infra. Division xiii. , Nos. 6, 1, 9.

400 Marine Insurance Companies [div. xi. §4]

stock was entitled to one vote, <£'5,000 to two votes, c£^8,000 to three'
votes, £\%000 to four votes, which was the maximum*. The lists!
were opened for subscriptions on December 22nd and were soon filled.
The sum of £\ per cent, was called up; and, as early as January
2nd, 1720, the shares were quoted at 2f, rising to 5 on February
20th, at which date, those of the company already established,
had touched 41 — these prices representing a premium of from 300 to J
400 per cent, on the amount paid up. By this time Lord Chetwynd
had become interested in the undertaking recently floated, which was
described as " Ram and Colebrook's Insurance," " Chetwynd's Insurance
or "Chetwynd's Bubble,''' while the company carrying on business at
the Royal Exchange was generally described as " the Old Insurance^,*"
" Onslow's Insurance " or " Onslow's Bubble." The latter was not only
threatened with the rivalry of the former, but with that of other
companies which were being promoted. After staving off enquiry for
six months, it was now forced to endeavour to regularize its legal
position. In consequence of the report of the Attorney-General in
1719, the directors admitted that it was a mistake to style their under-
taking the societies of the Mines Royal, Mineral and Battery Works,
and they again decided to ask for a charter of incorporation. On
January 8th, 1720, their request, together with counter-petitions, was
referred to the Attorney-General ; and, on the appointment of the
Committee of the House of Commons to enquire into recent fishery and
insurance promotions, the affairs of this undertaking acquired con-
siderable prominence. It was shown that during the short time that it
had been in existence, policies on English ships, formerly underwritten
in Amsterdam, were now done by this body, and that business had
come to it from Holland. It was also stated that all claims had been
j)romptly met^ The company, promoted by Stephen Ram, testified to
the general advantages of insurance by a company. It drew attention
to the great number of failures of individual marine underwriters, stating
that the loss to merchants, through this cause alone during the past
twenty or twenty-five years, was ^2,000,000 ^ To this argument it was
replied, on behalf of the present insurers, that none of the proposed
companies was aiming as much at legitimate business as to obtain great
estates for the first subscribers " by blowing up the stock." The answer

* Journals of the Hotise of Commons, xix. p. 346.

'^ This term was due to the use of the charters of the Mines Royal and Mineral
and Battery Works.

^ Journals of the House oj' Commons, xix. p. 344.

* Ibid. J XIX. p. 346. The failures of underwriters from 1718 to 1720 were said
to have numbered 150, but Mr Frederick Martin points out that most of these were
not regular frequenters of '' Lloyd's Coffee House" — The History of Lloyd's and of
Marine Insurance in Great Britain, London^ 1876, p. 102.

Div. XI. § 4] Shales' Insurance 1720 401

of the governor of the company, founded by Ram, that " he can't tell
whether any of the stock is sold out or whether it continues in the
hands of the first subscribers, but that no transfer was made of any of
the stock, for it was the chiefest care of the persons concerned to think
of methods to prevent stock-jobbing,"' is more than a little specious,
since transactions in the shares were numerous and at advancing prices
until February 20th. On the reports of the Attorney -General on
March 5th and 7th there was a considerable fall in the shares of both
companies \

There was a third proposed undertaking involved in the proceedings.
This was one promoted by Charles Shales, the nominal capital of whi(;h
was d^l ,000,000 2. On behalf of this venture it was deposed that the
risks of private underwriting were great, since " twenty years ago,
within a few weeks thirty or forty persons, private insurers, had gone
off." During the progress of the enquiry, evidence was adduced showing
that the methods of the directors of this enterprize were not above
suspicion. Promotion money was paid to a bankrupt, and part of the
sums, received from the shareholders, was disbursed in the purchase of
allotment letters, at a premium of over 60 per cent., "in order to oblige
some persons by letting them into the subscription.'' On such evidence
the success of this scheme became doubtful, and it was recognized that
only those identified with the names of Onslow and Chetwynd were
likely to be favourably considered. The Attorney -General reported on
March 7th, pointing out that " the sense of the gi-eater part of the
merchants of the City of London, who have concerned themselves on
this occasion, is in favour and approbation of such an incorporation as
is prayed," but, he added, " as no satisfactory reason has been offered to
me for erecting such an incorporation on so large a joint-stock, as is
prayed also in this petition ^ the ends of trade will, I think, be suffi-
ciently served by a far less joint-stock than is herein proposed, in case
his Majesty should think fit that any such charter should be granted,
and, by a reduction of such joint-stock to a competent sum, sufficient only
for the purposes aforesaid of insurance, any misapplication, which might
otherwise be made of such joint-stock to purposes different from that of
insurance of ships and merchandizes and which may be of great incon-
venience to the publick, will be prevented : but if his Majesty shall be
graciously pleased to erect such a corporation, under proper regulation.

Royal Exchange London

£10 paid £1 paid

1 Highest price, Feb. 1720 41 5

Quotations, March 1720 2U— 35 3^—4^

2 Vide infra, Division xiii., No. 10, p. 445.

3 This opinion was given primarily on the petition of Chetwynd's insurance.

S. C. III.

402 Marine Insurance Companies [div. xi. § 4

I am humbly of opinion th^t it is by no means advisable to erect twoi
or more corporations of that nature ^"

Between the date of this report and that of the Committee of the
House of Commons on April 27th seven weeks elapsed. The latter
document was adverse to the marine insurance schemes, and a bill was
to be brought in to suppress recent unauthorized promotions. Mean-
while the supporters of the proposed companies had not been idle.
After more than two years of struggle, they had at length obtained an a
opinion from the law-officers of the Crown, which, though qualified, was
on the whole favourable to their hopes. It is true that, in it, objection
was taken to the large capitals proposed, and it remained for the
promoters either to reduce the nominal amount or else to justify it.
The latter course was adopted, and negotiations were commenced by
the two companies, under which each undertook to discharge .^300,000
of the arrears of the Civil List. On May 4th the King sent a message
to the Commons hoping for " their ready concurrence " in the erecting
of two marine insurance corporations, whereby (in addition to thefl
benefit to trade) the debt on the civil government would be lightened,
"without burdening the people with any new aid or supply.**' On a
motion being made, approving of such incorporations, the proposal was
carried by 186 votes to 72^. Accordingly, clauses were added to the
bill for preventing the taking of subscriptions of capital by companies,
authorizing the foundation of two marine insurance companies which
were granted a monopoly of this class of business for 31 years against
other companies or partnerships with a joint-stock, but not against
individuals or partnerships without a joint-stock. The East India :
and South Sea companies were exempted from the operation of the
former part of this clause. The bill was read a first time on May 20th
in the House of Commons, and, having passed the Lords, it received the
royal assent on June lOth^, and on the 22nd two charters, almost
identical in every respect but the title, were signed. At length the
company which had been described by so many different names — the
Mercers' Hall Marine company, the Undertaking kept at the Royal
Exchange, the Societies of the Mines Royal, Mineral and Battery
Works, Onslow's Insurance — received a fixed designation as the Royal

1 Journals of the House of Commons, xix. pp. 346, 347.

2 Ihid., XIX. pp. 355, 356. As soon as possible after this favourable vote, the
company issued £60,000 stock on May 18, on which 10 per cent, was called up.
Since the quotation at this date was 60, it is probable that the issue was made at a
considerable premium, the amount of which however is not known — vide Summary
of Capital, A, p. 410.

3 6 George I., c. 18, §§ 1, 4, 6, 1, 12, 16, 20 : Journals of the Home ofCommms,
XIX. pp. 365^ 373.

Div. XI. § 4] Two Charters granted 1720 403

Exchange Assurmwe ; while its friendly rival—known hitherto first as
Ram's insurance and then as Chetwynd's insurance — became the Loridcm
AssuranceK The main provisions, after the incorporating clause, are the
same in either charter. Each company was entitled to elect a governor,
sub-governor, deputy-governor and twenty-four directors^, who con-
tinued in office for three years. Voting rights, qualifications, the oath
of office-bearers and the form of transfer are all minutely prescribed'.
Each undertaking was authorized to raise a capital of ^g^l, 500,000 ;
and it may be conjectured that the method, by which this amount was
arrived at, was by adding to the subscribed nominal stock of the Royal
Exchange the sum payable to the Exchequer. The total, so reached,
would just have exceeded =£'1,500,000 and so the round million and a
half was determined. The capital of the one corporation being thus
settled, that of the other was fixed at the same amount*. Both com-
panies were bound to keep such a stock of ready money as would suffice
to pay all just demands on their policies, and they were empowered to
create an " additional stock "" by making calls to meet such losses ; but,
when the emergency was passed, the sums, so paid, might be divided
amongst the members^. It was further provided that no member of either
corporation might hold any share or shares in the other, under penalty
of forfeiture^. The amounts and dates of payment of the <£'300,000 by
each body were explicitly stated — d^l 00,000 being payable in either case
on or before July 22nd and the balance in four equal sums of d£*50,000 at
intervals of two months'. If any of these instalments should be in arrear
for thirty days, the charter of the defaulting company was revokable.
Subject to this condition, the joint-monopoly of marine insurance
against corporations, in the terms of the act, was recapitulated, with the
proviso that either corporation might be determined, within the space of
the next thirty-one years^ on the repayment of the c£'300,000, without
interest; but, after 1751, either or both corporations might be dissolved,

1 It is noteworthy that, in neither title, is the undertaking incorporated described
as a company, corporation, society or fellowship.

2 Tliis was on the model of the South Sea company, vide supra, p. 295.

3 The Charters of the Royal Exchange Assurance and of the Royal Exchange
Assurance of Houses and Goods from Fire, pp. 1-26; The Charters of the Corporation
of the London Assurance, London, printed by Sir Joseph Causton and Sons, pp. 1-19.
In the case of the London Assurance the sliding scale for votes under the charter
was repealed by 54 & 55 Vict. c. 126, § 37.

* Charters {Royal Exchange), p. 38 ; (London), p. 27.

6 cf. the additional stock of the New East India company, vide supra, ii. p. 182 ;
Charters {Royal Exchange), pp. 87, 41, 42; {London), p. 28.

6 Ibid, {Royal Exchange), p. 54 ; {London), p. 37.

7 Ibid. {Royal Exchange), p. 36 ; {London), p. 25.

26—2

404 Marine Insurance Companies [div. xi. § 4

without return of the specified sum, should " their further continuance
be hurtful or inconvenient to the publick^"

During the interval between the report of the Committee of the
House of Commons (April 27th) and the end of June, the market in the
shares of the two companies was an excited one. In anticipation of the
former event, on April 23rd those of the London company had opened
at 4 J, risen to 11 and closed at 9. After the King'*s message to the
House of Commons on May 4th they touched 19, while those of the
Royal Exchange were at 38. By this time ^5 was paid in on the former
and £\0 on the latter, so that the relative premiums were the same.
As the inflation of the period grew, both shares advanced. Before the
end of May the prices of the beginning of that month were doubled,
and by the end of June the Royal Exchange had touched 135 — the
London 62. Up to the 15th of August quotations advanced and on
that day the former touched 230 and the latter 170^. Both companies
had invested in South Sea stock, and preparations were made for
obtaining more capital to continue these operations. Just at this timej
the government determined to take action against the numerous pro-
motions of the time ; and, when it was known that the governors and
directors were summoned to appear at Whitehall, the market gave way,
with the result that, by the date of the interview (August 22nd), prices
were only one-half what they had been a week before. Eventually the
" Lords-Justices were pleased to caution them [i.e. both courts] to keep
expressly to the limitations of their charter, that no complaints might
lye against them'."" It is not improbable that both companies had
joined in the prevalent speculation in stocks. Thus it is noted on
July 13th that the Royal Exchange had asked leave of the South Sea
company to subscribe d^74,300 of redeemable debt in anticipation of
the opening of the lists in the following months

Meanwhile the financial condition of the two corporations had
become interesting. Each was bound to pay c£*l 00,000 to the Ex-
chequer on July 22nd and i^50,000 on September 22nd^ To meet this

1 Charters {Royal Exchange), pp. 55, 56 ; {London), pp. 37, 38.

2 These quotations are taken from Freke and the newspapers. The Bubbler's
Mirror gives the maximum for the Royal Exchange 250 and for the London 175.
That the speculation in the shares of both companies was very great is shown not
only by the quotations, but also by the statement of Aislabie, who said that '' these
two projects were founded in greater iniquity and contributed more to the publick
calamity than anything else" — Mr Aislabie's Second Speech on his Defence in the House
of Lords, London [1721], p. 14.

3 The Weekly Journal or British Gazetteer, Aug. 27, 1720.

* Minutes of the South Sea company, Brit. Mus. Add. MS. 25,497, f. 30.
^ Charter {Royal Exchange), p. 36.

Div. XI. § 4] Financial Difficulties 1720 405

the London company had realized almost the sum, needed for the first
instalment, by calls of £5 per share, while the Royal Exchange had
received more than the required amount by the payment of 10 per cent,
on its capital of dfi'1,212,000 in its original form^. In the two months
between the two payments, much had happened. A week before the
second was due, South Sea stock, which had been over 1000 at the
height of the boom, had fallen to below 600, with the result that it was
impossible to carry out the original intention of providing the payments
to the State from profits made on the Stock Exchange. The London
company faced the difficulty by resolving on September 14th to call up
a further £5 per share. The position of the Royal Exchange is not
quite so clear. Apparently a public issue of shares had been projected
in August since it was reported on September 10th that "the sub-
scription, taken in some time since, was to be all returned^" Whether
this was done or not, on the 19th and 20th lists were opened for a new
subscription which was limited to the registered proprietors, who were
given the opportunity of taking up an amount of stock equal to their
present holdings at 180 per cent., of which 20 per cent, was payable
on application and the remainder in instalments of the same sum at
intervals of three months^. No doubt the issue-price was fixed in
relation to the market-quotation of the stock which was 180 or over
from August 10th to 17th. The effect of this operation would have
been to increase the nominal capital from d^l ,21 2,000 to d^2,424,000 ;
but, when the subscription had been paid up, the company would have
had funds provided by its stockholders to the extent of ^2,302,800
(made up of 10 per cent, on the first half of the capital and 180 per
cent, on the second half) with an uncalled liability of ^2,181,600 being
90 per cent, on the total capital. The completion of the scheme was
frustrated by the collapse of the stock-market. Just four days after the
lists were due to close, came the failure of the Sword Blade company
and of many other bankers (September 24th), with the result that the
stock recently allotted at 180 was selling at 65. Needless to say, as in
the case of the South Sea company, there was a clamour for the revision
of the terms, and on October 28th the following resolutions were passed.
" Every proprietor in the Royal Exchange Assurance company, who hath
paid in 20 per cent, on the subscription, is entitled to two transferrable
shares for each <^100 he had in the Mines Royal, Mineral and Battery

1 Vide infra, Summary of Capital, A, p. 410. To the sum mentioned above there
is to be added the probable premium on the issue of May 18th, vide mpra, p. 402
(note 2).

2 The Weekly Journal, September 10, 1720.

3 Post-boy, September 8-10, 1720; The Royal Exchange Assurance Magazine, i.
p. 119.

406 Marine Insurance Companies [div. xi. § 4

Works, and they are now sculling 10,000 shares at ^^20 per share for so
much capital stock ; £^ to be paid on subscribing, and no more than
c£*4 per share at a time and that after 14 days notice ; and for every five
of these shares a transferrable share will be allowed on paying ^10 down
and so in proportion to every five shares, liable to no further payment^*"
This scheme consists of several different parts. First, in exchanging
the capital of the Mines Royal and Mineral and Battery Works for
that of the Royal Exchange Assurance, a change was made. The
former, prior to signature of the charter, had a stock of ^1,212,000 on
which 10 per cent, was called up. It had been decided to reduce the
nominal capital by one-half, transforming it into 12,120 shares of £oO
each with c£*10 paid^. Now those, who had subscribed to the issue of
stock of September, had already paid 20 per cent., that is just twice as
much as the old proprietors. The former were forgiven the instalments,
they had contracted to pay, and were offered two of the Royal Exchange
Assurance shares of £bO each, on which their deposit was accepted in
satisfaction of the call of 20 per cent. But, of those who had taken up
shares, either in this or the former issues, some had not paid the calls,
and it was announced on October 6th that proprietors, who failed to
meet these claims at latest by the 21st, should forfeit their holdings ^
Owing to the recent panic, there were many defaulters, and thus a
quantity of shares remained at the disposal of the company. The con-
cluding clause of the resolution of October 28th relates to these, and it
may be interpreted in the following manner. Hitherto the new issues
of capital had been confined to those who were already proprietors;
whereas now the shares, not taken up, were to be offered to the public
at 20, that being the lowest market-price from October 14th to 28th.
As an inducement to subscribers, they were offered one additional share
for every five at the reduced price of .^'lO ; so that, by accepting these
terms, six shares could be secured at ^110, as against <£120 in the
market. Though the bonus was a substantial one, it was not sufficient
during the weeks of deep depression following the recent crjsis. Alto-

1 Daily Post, Oct. 28, 1720.

2 The Royal Exchange Assurance Magazine, i. p. 119.

3 The following is the resolution — "That a call be paid on or before the 13th
inst. of 20 per cent, by the proprietors of such reduced stock as they shall not accept
the subscription and make the payment on or before the 10th inst. And such
person or persons as have not hitherto nor shall subscribe the stock they were
entitled to in the Mines Royal, the Mineral and Battery Works on or before the
21st inst. shall be excluded. The court of directors further give notice that the
transfer-books will be shut on the 20th inst. and continue so till the 27th inst. in
order for a dividend"— i)oi7y Courant, Oct. 10, 1720. For the year 1720 the total
dividends amounted to 25 per cent. — Royai Exchange Assurance Magazine, i. p. 121.

Div. XI. § 4] Re-ddjustment of Capital 1720 407

gether there turned out to be 10,760 shares available, out of which by
November 11th "not 2,000 had been taken i." The directors persisted
in retaining the amount of nominal capital, as fixed early in October,
that is the original " reduced '' capital of ^606,000 nominal, divided
into 12,120 shares of ^50 each with ^^10 paid, and an equal amount of
new capital, arising out of the subscriptions of September and October.
It would appear that, of the issue of September, only about 1,360
shares were actually registered, and less than 2,000 of that in October.
This left a balance unsubscribed of close on 9,000 shares, and the
directors were authorized to sell these " to pay the company's debts."
Only a portion of these had been disposed of; and it is possibly to this
circumstance that the interesting phenomenon of this corporation, owning
d£*63,235'^ of its own paid up capital, is to be attributed.

The difficulty experienced in the selling of the shares on behalf of
the company need occasion no surprise in view of the prevailing distrust,
the large liability and the relapse in quotations. By November 17th
the price had fallen to 9 both for these and those of the London
Assurance. The great reduction, as compared with quotations during
the height of the boom, is to be ascribed partly to general influences
connected with the collapse of the speculative movement, partly to
causes peculiar to the finances of the two insurance corporations. Both
had been brought into such a position that they were unable to pay the
second instalment of the sum due to the State (which amounted to
0^50,000 in each case) at the date limited by the charters (September
22nd). Had it not been for losses sustained by speculation or in the
general breaking down of credit, the corporations should have had
sufficient funds available to pay not only the d^l 00,000, receivable from
each in July but also the ^^50,000 similarly due in September. The
Royal Exchange had received at least =£^1 30,000 from calls that were
actually paid, to which are to be added the possible premiums on the
May issue of shares, as well as any sums obtained from proprietors who
forfeited their holdings. The London Assurance by September had
called up J^196,048. 15^.^; but, just at this period, it met with a serious
misfortune in the loss of twelve Jamaica ships, which it had insured*.
Neither company was able to pay the instalments of ^^50,000 each, due
in September and November 1720. Both, as companions in misfortune,
deposited .^g'l 1,000 at the Exchequer in October; and, in the case of
the Royal Exchange, the payment made by it was only obtained by the

^ Relton, Fire Insurance, p. 157.

2 The Royal Exchange Assurance Magazine, i. p. 119.

3 Vide infra, Summary of Capital, B, p. 411.

* The Universal Dictionary of Trade and Commerce, by Malachy Postlethwaite,
London, 1774 — Article, Actions.

408 Marine Insurance Companies [div. xi. § 4

sale of stock, a power of attorney having been sealed on the 5th for the
transfer of ^^1,500 India stock which realized about <^4,000\

Though it was said that towards the end of the year the companies
" scarce subsisted but in the complaints the proprietors made of being
cheated by the directors^," in reality vigorous steps were being taken
towards the revival of their fortunes. In this development it appears
that the lead was assumed by the Royal Exchange Assurance, which
determined to add to its profits by underwriting fire-risks. It found
the nucleus of a connection in the Sadlers' Hall Insurance company,
which had been formed in February 1720^, but which had failed to
obtain legal authorization. This undertaking had called up hs. per
cent, in February and .£'4. 15*. per cent, in June*, making £^ in all.
Much of this capital was lost in speculations in South Sea stock ; so
that, on the whole, the proprietors were willing to sell the goodwill of
their business. Accordingly, it was agreed on November 11th that the
undertaking should be sold to the Royal Exchange Assurance, on the
basis of the transfer of two shares in the latter (with £%Q paid on the
two), as against ^£"1,000 nominal in the former (with c^50 paid in)^
The London Assurance also started fire-insurance, and succeeded in
issuing 1897 shares at the then par of ^10 per share, obtaining thereby
,^18,970*'. With the aid of the funds secured from this new develop-
ment, it became possible to negotiate with a view to obtaining immunity
from the claim by the State for the whole of the balance of the
d^300,000, originally offered by each company. Both had made a
further small payment of ^250 on March 22nd, 1721. Thus at this
date the two corporations had paid exactly equal amounts, namely
.s£*l 11,250, leaving ,^^1 88,750 outstanding. When the charters au-
thorizing them to transact fire-insurance were signed on April 29th,
1721, it was made a condition of the validity, both of these instruments
and those of the previous June, that the whole of this balance should
be paid'; but, by subsequent application to Parliament, the companies
were freed from ^150,000 of the debt due by each, leaving only ^£^38,750
still to be found.

The difficulties of the year 1720 and the starting of fire-insurance
left traces on the capital accounts of both corporations. The London
Assurance in 1722 found it necessary to call up £^ per share making all

1 Court Book, East India company, xmx. f. 131.

^ Postlethwaite, Dictionary of Trade and Commerce, ut supra.

2 Vide infra. Division xiii.. No. 24, p. 446.

* Post-hoy, June 11 to 14, 1720.

^ Walford, Insurance Cyclopcedia, iii. p. 474.

* Vide infra, Summary of Capital, B, p. 411.

7 Charters {Royal Exchange), pp. 81-90; {London), pp. 57-61.

Div. XL § 4] Fire-insurance also undertaken 1720 409

the shares, both marine and fire, ^13 paid. Since there were 23,762
shares issued, the paid up capital before this call was .£^237,968. 15*.
and immediately afterwards it was ^309,173. 15.9. Three years later
12,000 shares were issued at par (^13) and in 1738 10,9. per share was
returned to the proprietors. Allowing for one or two minor operations,
by February 1750 the capital consisted of ^448,275 in 35,862 shares of
£\% 10*. paidi.

The Royal Exchange Assurance issued 3,612 shares, regarded as
having ^10 paid, in satisfaction of the purchase-price of the Sadlers'
Hall undertaking. To provide further capital between 1722 and 1724
8,566| shares were issued, and in the latter year the paid up capital was
converted into stock. In 1725 there was created £5 of stock making
the total at that date =£'364,1 89 ; but, in the same year, an adjustment
was effected, in connection with the purchase of the Sadlers' Hall
business, which reduced the capital to .£358,329 ^

1 For the details vide Summary of Capital, B, p. 411. It is these figures that
Anderson appears to have had in his mind when he states that in the summer of
1720 the capital of this company consisted of 36,000 shares of £12. 10*. each —
Annals of Commerce, in. p. 343.

2 Vide infra. Summary of Capital, A, p. 410.

410 Capital of the Royal Exchange 1719-26 [div. xi. § 4

Summary of the Capital of the Royal Exchange and of' the
London Assurance.

A. The Royal Exchange Assurance^.

Date

Nominal
Capital

On which
paid in

1719
1720, May 18

1720, October

1720, Sept. to
1721, Sept.

1721
1721—1724
1724, March

1726, March

1726—1726

The original form of the capital (as that of
the Mines Royal, Mineral and Battery
Works) was in stock

Issue of £60,000 stock on which 10 per cent
was paid ...

Total

Written off the nominal capital

Balance

The £606,000 nominal capital was now divided
into 12,120 shares of £50 each, on each of
which £10 was paid.

Issue of £606,000 in 12,120 shares of £50, on
which £10 per share was called up

Total

Issue of 3,612 shares credited with £10 paid

„ 8,566f shares, £10 paid

The paid up capital was now converted into

stock.
Issue of £5 stock

Total

Deduct £5,860 stock, written off

Total

Issue of £150,000 stock

Total

£
1,152,000

£
115,200

60,000 I 6,000
121,200

1,212,000
()06,Q00
606,000

606,000

1 ,212,000

121,200

242,400

36,120
85,664

364,189
5,860

358,329
150,000

508,329

^ This summary is founded on an article in The Royal Exchange Insurance
Magazine, i. pp. 118, 119, The figures were collected immediately after the
destruction of the early documents of the corporation in the fire of 1838, though
not printed until 1904.

Div. XL § 4] Capital of the London Assurance 1720-50 411

B. The London Assurance^.

Date

Before

1720,

Sept.

Sept. 14
Dec.

1722,

March 6

1725,

June 9

June 1728

to 1730

1738,
March 21

1750,
February

1720,
Oct. 20

1721,
May 18

1722,
March 6

1738,
March 21

1750, I
February

Marine undertaking.
19,740 shares taken up and £5 per share

called up.
On 170 shares only part of the calls were

paid — these shares bein^ forfeited

On 19,570 shares a call of £5 per share, paid
in full, realizing

Call of £5 per share, paid in full, realizing . . .

282 shares offered for subscription at £10,
of which were taken up ...

Call of £3 per share on 19,782 shares, realizing

12,000 shares issued at £13 per share

bought in and paid up at £8

100 „
per share

Total calls of £13 0
Repayment of 0 10

0 per share

paid up

£500 0 0

348 15 0

£12 10 0

The capital account was credited
with the deficiency of £5 per
share on 100 shares, issued
from 1728-30 at £8

Less calls received on 170 shares

issued in 1720

Total 31,882 shares, £12. 10*. paid

Fire undertaking.
Issued 1,897 shares at £10 per share

,, 2,083 „ ,,

Call of £3 on 3,953 shares

Total shares with £13 0
Repayment of 0 10

0 called up

0 per share on

3,980 shares

£12 10 0 paid per share
The capital account was credited with £3 per
share which had not been paid on 27 shares...

Total Fire Undertaking

„ Marine „

„ Fire and Marine Undertakings ...

Number
of shares

On which
paid in

£ s. d.
348 15 0

19,570 ! 97,850 0 0
! 97,850 0 0

212

12,000

100

31,882

1,897
2,083

3,980

3,980
31,882

35,862

2,120 0 0
59,340 0 0

15H,000 0 0

800 0 0

414,314 15 0
15,941 0 0

398,373 15 0

151 5 0

398,525 0 0

18,970 0 0

20,830 0 0

11,859 0 0

51,659 0 0

1,990 0 0

49,669 0 0

81 0 0

49,750 0 0
398,525 0 0

448,275 0 0

1 I am much indebted to Mr C. A. Denton, the secretary of the corporation, for
this full account of its early financial history.

DIVISION XII.

CASES OF COMPANIES THAT USED THE SAME
CHARTER OR GRANT FOR CARRYING ON DIF-
FERENT AND SUCCESSIVE UNDERTAKINGS.

SECTION I. CAPTAIN POYNTZ AND COMPANY
FOR PLANTING THE ISLAND OF TOBAGO

(1683).

This scheme, in its original form, has claims to be ranked amongst
the colonizing companies ; but, since it embodies almost all the specu-
lative ideas that were popular in the last quarter of the seventeenth
century, such as the establishing of a land bank, treasure seeking and
the working of minerals, it may be best dealt with under the present
heading. The grant, on which the project was based, had an interesting
history. Originally, after the island of Tobago had been taken by
Sir T. Warner in 1626, it was included in a grant to James, Earl of
Carlisle ^ No settlement having been made by Carlisle on Tobago, the
Duke of Courland attempted to plant it during the Interregnum.
After the Restoration Charles II. made a fresh grant in favour of the
Duke. The Dutch held the island, till it was retaken by the English
in 1672. After the peace between Holland and England, the Dutch
again attempted to colonize it, but they were driven out by the
French in 1676. The Duke of Courland then revived his pretensions,
and on September 20th, 1681, he granted the island upon certain con-
ditions to Captain John Poyntz^

Poyntz made some preliminary enquiries, and by 1683 he took steps
to float a company to develope the property. Tobago was estimated to
contain 120,000 acres, of which 40,000 were to become a part of the
division to the shareholders. An interest in the patent for the searching

1 The chief use made by Carlisle of his grant was, in 1628, to authorize the
plantation scheme of a syndicate of nine London merchants who were entitled to
settle 10,000 acres. At one period this venture is said to have " promised great
advantage to the promoters of it"— History Civil and ComrmrcUil of the British Colonies
m the West Indies, 1793, i. p. 333.

2 State Papers, Colonial Entry Book, vii. pp. 384-6; The Present Prospect^ of the
Famous and Fertile Island of Tobago, with a Description of the Situation, Growth,
Fertility and Manufacture of the said Island. To which is added Proposals for the
Encouragement of all those that are minded to settle there, by Captain John Poyntz,
London, 1683 [Brit. Mus. 1061 . g . 29j.

416 The Tobago Company 1683-6 [div. xii. § 1

for wrecks was also promised them. The most original aspect of the
promotion was the part assigned to the foundation of a land bank for
Tobago, which Poyntz claimed to have invented. A registry of lands
was to be set up in which all titles must be recorded. The settlers
were to lodge these, or their goods, with the bank, against which they
were promised a " credit *" in its books at 2 J per cent, interest. The
bank not only undertook to warehouse produce, but also to ship it to
England, Barbadoes, Brazil, Surinam or even to Guinea. The same
institution was to provide fortifications, charging 1*. per ton, as harbour
dues, on all ships touching at the island.

The assets to be acquired by the company were first 40,000 acres of
land, two-thirds of the profits of the bank of credit and two-thirds
of the benefit of a patent "for taking up wrecks out of the sea and
fishing for pearl and ambergris." The capital was to consist of d^60,000,
divisible into 5,000 shares or " proportions *" oi £\^ each. Thus the
subscriber would obtain 8 acres, as part of the division on every share
he took up. Calls were payable as to 5 per cent, on August 10th, 1683,
5 per cent, on September 10th, 10 per cent, on October 10th, and there- m
after 20 per cent, in each of the four following months. Poyntz f
reserved to himself one-half of all money subscribed in payment for
the land, grants, and inventions he transferred to the company, the
other half remained available as working capital. He confidently
promised that there was a great likelihood of all shareholders receiving
100 per cent, dividends every year after the firsts

Poyntz began to push the promotion of his company vigorously;
and, besides printing an ^'Advertisement'''' of his proposals, he hit upon the
ingenious device of inducing printers to bind up a summary of these in
books offered for sale about March 1683^. There can be little doubt that
some of the shares were taken up, since " Captain Poyntz and company "
were shipping settlers in December 1683^ The authorities were not
satisfied as to the nature of the enterprize, and the ship was detained ^
In 1686 the Attorney-General pronounced that Courland's grant was
void in law, while that to Poyntz from him was contrary to the spirit of
the original concession^. The final check to the embryo-colony came
when Courland repudiated, not only the agreement with Poyntz, but also
the agent who had made it^.

1 Advertisement and Proposals offered by Captain John Poyntz [1683].

2 An instance of this will be found in the copy of Salt and Fishing, by John
Collins, in the British Museum. Collins' book is dated 1682, which is to be under-
stood as 168§ as, from internal evidence, it cannot have been printed before March
1683.

3 State Papers, Colonial Entry Book, vii. p. 220.
* Ihid., Colonial, lii. 96.
5 lUd., Colonial Entry Book, vii. p. 346. « lUd., Colonial, lx. 20.

Div. xii. § 1] The Tobago Company 1694-1702 417

After such uncompromising hostility, both from the home and
foreign governments, Poyntz'*s schemes were not prosecuted during the
next five or six years. In 1694 they were again revived, chief stress
being now laid on the prospects of obtaining pearls and antimony^ In
the following year the two tracts, that had been printed in 1683, were
re-issued. On this occasion, expeditions were actually despatched
towards the island, one of which was reported from Barbadoes in 1698"^
By 1702, in a petition from Poyntz and his partners, it was stated that
altogether eleven expeditions had been made to Tobago. There is no
longer any mention of a settlement having been attempted, but great
weight is laid on the richness of the mines of lapis lazuli^ that had
been discovered, as well as the value of pearl and ambergris which could
be obtained. The riches obtainable were estimated at several hundred
thousand pounds. The partners pointed out the need of a charter of
incorporation to enable them to raise more capital, and they offered
a royalty of one-quarter of the value of all the minerals, pearls, or
ambergris they secured, if the Crown would grant a charter^ After
1702 a few more expeditions may have been made, but no record
remains that the hopes of the founder of the enterprize had been
realized.

1 Anglice Tutamen, pp. 8_, 21, 32.

2 State Papers, Board of Trade (Barbadoes), xliv. p. 233; Board of Trade
Journal, xi. p. 305.

3 Ibid., Petition Entry Book, v. pp. 6, 7.

S. C. III.

SECTION II. THE GOVERNOR AND COMPANY OF
UNDERTAKERS FOR RAISING THE THAMES
WATER IN YORK BUILDINGS.

A. The Water Supply Company (1665-1719).

During the seventeenth century many attempts were made to impro
the water supply of London, by means of puni ping-engines on the banks
of the Thames. Some of these enterprizes, either through defects in the
engine employed or the position being unfavourable, were short-lived,
while others became more permanent^ Amongst the latter was an
engine, which was supposed to raise water by perpetual motion, in-
vented by Ralph Wayne and Francis Williamson, early in the reign
of Charles II. On May 6th, 1665, a patent was granted to Wayne
and Williamson, enabling them to convey water to the inhabitants of
Piccadilly, St James' Fields, Haymarket and the neighbourhood, both
from springs and from the Thames ^ Whether the undertaking was
actually started at this date does not appear, and the patentees are
next heard of in connection with the sale of York House as building
ground in 1672. This estate was situated " on the south side of the
Strand, immediately to the east of what is now the site of the Charing
Cross railway station,'"* and the more important structures erected were
known as the York Buildings, which became later the chief auction and
concert rooms in London during the reign of William III. Ralph Wayne,
who was now associated with Ralph Bucknall, obtained a site in York
Buildings and erected a pumping station, which was described as an
edifice with a high wooden tower, situated at the foot of Buckingham
Streets By a patent dated May 7th, 1675, powers, similar to those of

1 For an account of the chief of these inventions vide supra, ii. pp. 479^ 480, in.
pp. 3, 11, 18, 19, 33.

2 The York Buildings Company, by David Murray, Glasgow, 1883, p. 4. This
work gives a very full and accurate account of the company. It is based on an
exhaustive study of the MS. pleadings in the many law cases in which the company
became involved.

^ Notes and Queries, 2nd Series, xi. p. 291, quoted by Murray, York Buildings
Company, p. 4.

Div. XII. § 2 a] a Water-pumping Comptany 1665-91 419

the previous grant, were conferred on the proprietors, and the developing
of the supply was taken in hand. The water from the Thames was
admitted by sluices into canals ; and, from the canals, it was pumped up
into cisterns on high ground, whence it flowed to consumers' houses by
two seven-inch elm-wood pipes^ These operations required capital;
and, eventually, the property was divided into twelve shares, the
original patentees selling some of them to provide funds when
needed.

There is no record as to the progress of the concern from 1675 to
1690. In the latter year the company suffered from the invariable mis-
fortune of the early water companies, namely the destruction of a part
of its property by fire. Efforts were at once made to repair the damage,
but further capital was necessary, with the result that the business was
now divided into 48 shares of i'lOO each, making the nominal capital
J?4,8002. As a consequence of the increasing of the capital, it was
decided to promote a private bill, which was passed in 1691.

This act was similar to that gi'anted in the same session to the
Shad well company^, and both are of interest as the first parliamentary
powers granted directly to a company for supplying water. Other contem-
\ porary undertakings were either unauthorized, or (as in the cases of the
New River and Hampstead Aqueducts) parliamentary powers, gi-anted
to the City, were transferred to the companies, or again (as in the case
of the London Bridge water- work) the City had licensed the enterprize,
which transacted business without a charter or act of Parliament. The
powers, conveyed by the act of 1691, confirm generally the previous charters,
and prescribe in explicit terms the internal government of the company
which is now expressly incorporated as the Governor and Company of
Undertakers for raising the Thames Water in York Buildings, with the
usual corporate privileges, including the right to purchase lands and
hereditaments. It was usual in charters and acts of this period to limit
this right of purchasing lands, but there is no such restriction in the
present case — an omission which had an important bearing on the
future of the company. The date for the annual meeting was fixed
for September 29th or one of the three following days, when one
governor and six assistants were to be chosen. Not only was the
company aristocratic in including a Sergeant-at-Law and a knight
amongst its numbers, but in a more curious way since, at the time of
obtaining the act, it appears that the number of the governing body

1 Murray^ York Buildings Company, p. 5.

2 Hydraulia, by William Matthews, London, 1835, p. 33 ; Special Report from
the Committee appointed to Enquire into and examine the several subscriptions for
Fisheries, Insurances , Annuities for Lives, S^c, 1720, p. 71-

^ Vide supra, p. 32.

27—2

420 The York Buildings Company [div. xn. §2a

and of the total shareholders was the same, namely seven, so there w;
no " commonalty^"

With so small a body of shareholders, it was scarcely to be expecte
that the company was likely to suffer from the evils of " stock-jobbing,"
which, according to the author of Anglice Tutamen, brought so many of
the enterprizes started from 1692 to 1694 to griefs But while this
danger was avoided — at least for the time — there was another, incident
to a period of activity, from which the undertaking suffered serious
damage, namely the excessive competition of other companies. Prior to
1690, there had been the New River and London Bridge companies^ ;
and, amongst the many schemes in the years 1692 and 1693, there were
several proposals for an increased water supply. The numerous in-
ventions of pumping-engines meant an intermittent competition, limited
only by the necessity of raising sufficient capital for the laying of pipes.
In 1692 the Hampstead Aqueducts were transferred to a company*;
which, as pipes were laid down, began to enter the district of the York
Buildings company from the north-west Still more serious was the
competition arising out of the linking together of a number of the old
water-courses by Richard Soames, under the title of the City Conduits ^
As early as 1695 the latter undertaking advertized that it was prepared
to supply consumers in a large number of places where mains had already
been laid, amongst others mentioned there being several streets which
lay within the area of the York Buildings company, such as Bond
Street, Charing Cross, Piccadilly and the Strand*^. Such competition
must have been intensified when Soames had effected the purchase of
the London Bridge works, for this company was then in a position to
compete with the York Buildings undertaking either from the west (by
the conduit waters from Paddington) or from the east (by Thames
water pumped from London Bridge). Thus, while the York Buildings
company seems to have made some profit, the continuous contraction
of its area of supply rendered the proprietors ready to dispose of the
business ; and, in March 1719 the waterworks were advertized for sale.
According to the description published, these " were very fit for carrying
on the service, and pipes in the streets were laid on to several tenants,
whose rents now amount to above ^^1,600 per annum, and with care
and diligence may be improved considerably^." Probably this possi-

^ Reports Hist. MSS. Com. , xiv. , Part 6, p. 33 ; Journals of the House of Commons,
X. p. 679. Extracts from two Acts of Parliament relating to the Gov. and Co. of
Undertakers for raising the Thames Water in York Buildings [1720]. Brit. Mus.
357 . b . 3 . (58).

2 pp. 26, 27. 3 Vide supra, pp. 12, 25. * Ihid., p. 5.

6 Ihid., pp. 13, 14. 6 Houghton, Collections, No. 133, Feb. 15, 1695.

7 Murray, York Buildings Company, p. 19; Walford, Insurance Cyclopadia, i.
p. 117.

Div. XII. §2 a] Purchase of the Charter 1719 421

bility would not have tempted purchasers, and the undertaking would have
languished and gradually fallen into disrepair had it not happened
that far-sighted men, who foresaw the coming speculative activity, were
engaged in endeavouring to secure charters of incorporation to give a
corporate existence to their schemes. Amongst these was Case Billingsley,
who had already aided in acquiring the patents of the Mines Royal and
Mineral and Battery Works for the insurance company, known later as
the Royal Exchange Assurance^. Following the example of the Sword
Blade company, he had a scheme for the acquisition of forfeited estates
and for following out a system of land and mineral development in
Scotland, similar to that projected by the Sword Blade company in
Ireland^ As the capital required would be considerable, it seemed
desirable to secure a charter ; and, quite apart from the feeling against
grants of incorporation at that date, the evidence given at the Com-
mittee of Inquiry in 1719 showed that it was often cheaper to purchase
an existing charter than to take part in the irregular and illegal bidding
for charters at the auctions conducted by the Attorney-GeneraP.
Therefore, what Billingsley was really anxious to purchase was the act
of Parliament, incorporating the company, and for this he paid the
former proprietors d^7,000, including the discharging of the debts in-
curred, amounting to d^l,845, so that the shareholders actually received
<£*5,155 in exchange for their stock in the company. Provided the
original capital of ^4,800 had not been increased and had been fully
paid up, this would give between ,^107 and ^110 for the original
stocks With the transfer of the property to Billingsley, the history of
the original company ends, and that of its successor was dominated by
different aims and methods, amongst which the water supply undertaking
occupied a very subordinate position.

1 Vide supra, p. 397. ^ V^de infra, Division xii., Section 3.

2 Journals of the House of Commons, xix. p. 305.

* Special Report from the Committee appointed to examine the several subscriptions
for Fisheries, S^c, pp. 70, 71. £7,000 is mentioned in round numbers as the price
of the concern. Probably the exact amount was £7,125, since Sir W. Thompson
received £440 for 4 shares, and payment of his proportion of the debt of the company
amounting to £153. 15^. As he held one-twelfth of the whole capital, this would
give —

Total debt paid by Billingsley £1,845

Remainder paid stockholders b,2^(i

£7,126

This price would give just 4| years purchase on the advertized receipts.

422 The TorJc Buildings Company [div. xii. § 2 e

B. The Land Development UNDERTAKma (1719). A

The whole scheme for the purchase of forfeited estates in Scotland
was typical both of the relation of the State to capital at the beginning of
the eighteenth century and of the ideas of the South Sea period of
finance, in fact the York Buildings company, as reorganized, was a most
interesting survival of all the errors of the year 1720, and its history is
the natural counterpart of the picture given by Charles Lamb of the
South Sea House, except that the latter represents the gradual flickering
out of the Bubble period, while the York Buildings company carried on
the same methods in the midst of scenes of action, and finally came to an
end in a maze of legal pleadings.

That this result was inevitable might at first sight be attribut
to the inception of the new undertaking on the eve of the boom
inaugurated by the South Sea company, but the cause lay deeper,
namely in the relation of the State to capital and also in certain cir-
cumstances, arising out of the Rebellion of 1715. As a punitive
measure, the forfeiture of the estates of leading supporters of the
Stuarts was deemed advisable ; but, when after considerable delay the
government had obtained possession, the question arose as to how the
lands could be sold. Cromwell had solved a similar difficulty by making
the escheated properties the payment of the principal of a State loan,
thus making the creditors of the State its partners in the Civil War\
In the Rebellion of 1715 no such scheme had been adopted, and there
were many obstacles in the way of obtaining any offers for the lands.
Scotsmen neither could, nor would they, if they could, have bought to
any considerable extent. There was a considerable amount of capital
available in England for investment, but Scotland was both remote and
disturbed, so that private persons would have been ill-advised to secure
properties which would have been unremunerative, owing to the feeling
in Scotland against the forfeitures, and still more against the methods
of the Commissioners for the sale of the estates^. Therefore the only
possible purchaser of the lands would be some organization, with strong
capital resources, formed for the purpose of developing the properties
acquired. Such a purchaser was found in Case Billingsley and those
associated with him, who had constituted themselves a coi-poration by
the acquisition of the act of the York Buildings company. The scheme,
however, was more far-reaching than a huge land-development company.
From 1710 various plans for life-insurance had excited great interest in

^ Vide supra, ii. pp. 843-7.

2 The Case of the Forfeited Estates in Scotland, Considered in a Letter to a Noble
L,..d, London, 1718, pp. 18, 19.

Div. XII. § 2b] Forfeited Estates purchased 1719 423

London. Those, which aimed at being of good repute, generally set
forth in their advertisements that the proprietors gave security of i^500
or £\^000 a year, for the payment of claims, invested in lands or
gi-ound-rents. Now the income from the forfeited estates was very
much larger, and Billingsley was acute enough to see that such a fund
would offer a security, unique at least in amount, for the foundation of
a new insurance business of the largest extent.

The plan of operations having been matured, the act of Parliament
and the waterworks were duly transferred to the purchasers, and on
October 27th, 1719, a general court of the new proprietors was held, at
which it was resolved " that this company in order to improve their
undertaking of raising Thames water in York Buildings, for the better
supplying of the inhabitants of that part of London and Westminster,
will forthwith lay open a subscription at Mercers' Hall for raising a
joint-stock and fund of ^1,200,000 for purchasing forfeited and other
estates in Great Britain, by a fund for granting annuities over lives and
for assuring lives ^'' It was further provided that shareholders in the under-
taking, later incorporated as " the Royal Exchange Assurance " (another
of Billingsley's promotions), but which was at this date described as the
" Governor, Assistants and Societies of the City of London of and for
the Mines Royal, Mineral and Battery Works, and for assuring ships
and merchandize," should have preferential allotment-. The whole
amount offered was immediately subscribed, and later i:^59,575 was
taken up ; so that, at the beginning of the eventful year, 1720, the
total nominal capital was ^1,259,575 on which 10 per cent, had been
paid up^ From the amount called up, and by borrowing, payment was
made of .^308,913. 146'. Bd. for various estates, yielding a nett rental of
<£15,378. 7*. 3i^fZ., so that the average price paid was slightly over
20 years'* purchase^.

At the beginning of the year 1720 many promoters had insurance
schemes ready to launch, and such persons saw with dismay that the
York Buildings company, with a rental of over £\5,Q00 from its estates
and in addition the possible profits of its waterworks, would be able to
offer an attractive security to intending insurers. By January 1720
steps had been taken towards effecting insurances, and the company
advertized that it was prepared " to grant annuities for lives and to
assure lives^'' Further, it had obliged the government, and already
the powers being granted to the South Sea company showed how

1 Murray, York Buildings Company, p. 20.

2 Vide supra, pp. 396-403.

3 Anderson, Annals of Commerce, iii. p. 339.

4 Beportsfrom Committees of the House of Commons, i. p. 595.

5 Daily Courant, Jan. 2, 1720.

424 The York Buildings Company [div. xii. § 2 b

advantageous this might prove. There was, however, one element of
weakness in the otherwise "strong position of the company. The act of
1691 was assumed to authorize the purchase of lands to any extent,
because contrary to custom no limit was mentioned ^ But it might be
held that this clause in the act should be construed in reference to th
context as a whole, and that, since the measure authorized a wate
supply company, the powers to purchase lands related to the require-
ments of that undertaking and that undertaking only. Therefore,
since by no stretch of imagination could estates in Scotland and
Northumberland be conceived necessary for a water company supplying
Westminster, the governor and assistants had acted ultra vires in making
such purchases. This was the view taken by the Attorney-General in
a report dated March 10th, 1720, which states " that the corporation*
created by the act of Parliament above recited, was so instituted for
the particular purposes therein specified : and though the power therein
given to purchase lands is not, by express words, restrained to any
particular annual value; yet by a reasonable construction, the exercise
of that power ought to be governed and limited by the purposes for
which the corporation was erected and cannot be understood to give
authority to that corporation, supposing it to exist, to purchase lands
to what value soever, and for purposes wholly foreign to the ends of
that incorporation." The report further characterizes the recent pro-
ceedings of the company as "an unwarrantable practice and of a very
dangerous tendency and highly in derogation of the Royal Prerogative ;
there being no ground or colour in law for the said corporation to
contract with others for taking in subscriptions for any sum, but much
less for so great a sum as d^l ,000,000, for the carrying on of an under-
taking, in the name of the said corporation, so different from the
purposes of their incorporation ; which subscriptions, if taken in,
pursuant to such contract are a misuser of the powers of the said
corporation, for which they are liable to prosecution, if your Majesty
shall so please^." This report had arisen out of a petition presented
by certain members of the company for a charter authorizing the new
enterprizes, and, probably in view of the unfavourable report of the
Attorney -General, the governor repudiated the petition, contending
that further powers were unnecessary. It is significant of the state of
legal administration of the time that the threatened prosecution never
became actual, and there is no mention of the company having acted
ultra vires during the remainder of its existence.

1 Vide supra, p. 419.

2 Special Report from the Committee appointed to inquire into and examine the
several subscriptions for Fisheries, S^c, p. 73; Journals of the House of Commons, xix.
pp. 349, 350.

Div. XII. § 2 b] Assurance and Mining Schemes 1720 425

This danger having been avoided, the prospects of the undertaking
appeared promising. By the summer of 1720, possession had been
obtained of most of the estates. The rental, less administration
charges, would have provided 5 per cent, on the purchase price. But
this was only the foundation of the profit-earning capacities of the
venture. As in the cases of the Bank of England and South Sea
company, the original investment became a fund' of credit, in which
additional and larger profits might be earned in the assurance business.
Then it would appear, too, that by developing the properties, some
of which contained minerals, large gains might be made, and there
remained still the revenue from the waterworks, which were to be
extended. In fact, looking at the prospects of the company, not in
the light of sad experience, but as coloured by the brightness of the
imaginative dreams of 1720, the undertaking embraced all the most
favourite channels of investment — land-development, mining, assurance,
and water supply. Therefore, in view of these facts or fancies, it was
little wonder that, when the shares were dealt in on the Stock Exchange,
transactions took place at a very high premium. The first recorded
quotation was no less than 89 for the ^100 nominal with =£'10 actually
paid up. This was on July 14th, when South Sea stock was at 970,
Bank of England at 240 and East India had touched 390. It is worth
noticing that the price of York Buildings shares was in some respects
anomalous, since South Sea stock had touched its highest point on
June 24th, and the fluctuations tended downwards for the next two
months, even though the great collapse had not yet taken place.
Whereas York Buildings shares rose steadily during the remainder of
July, standing at 104 on the 29th, after having been as high as 118
on the 22nd. During the first days of the month of August there
must have been some very good news of this company, for while other
stocks lost ground, York Buildings shares were quoted at 288 on Friday —
August 5th — a rise of 176 per cent, in a week, and a premium of no
less than 2,780 per cent, on the paid up capital of a company less than
nine months in existence. On the following Monday — August 8th — the
price was 290, on the Wednesday 295 and on the Friday and following
Monday it was again 290^ Rumours of the writ of scire facias (which
was issued on August 18th) depressed the price to 260 on August 17th,
and within a month the shares were selling from 50 to 40. By the
middle of October the quotation had fallen to 17, and on Thursday,
November 17th, just three months after the issue of the writ, shares
were practically unsaleable, the price mentioned being 9. During

1 These are the prices recorded in The Daily Cmrant. The Lmidon Gazette and
Archibald Hutcheson in his Computations give the highest price as 300. Anderson,
in his Annals of Commerce (iii. p. 339), quotes it at 305, The Bubblers Mirror at 300.

426 The York Buildings Compamj [div. xii. § 2 b

December there was some improvement, the first and lowest quotation
being 15 and the highest 32. In the early months of the following year
the fluctuations were round about 23. .

The rapid changes in the price of the stock, after the issue of the-
writ, were accounted for by certain subsequent events, arising out of
the financial condition of the company. The writ of scire facias was
hanging over it from the middle of August until September 1st, when
the Lords Justices recalled the order, upon the promise of the governor
and assistants that " they will proceed only in the ancient known and
regular methods, agreeably to law and to the intention of their con-^
stitution and the encouragement given them by Parliament." They
also undertook " to eschew their extravagant way of raising money, and
to return to the regular method of making calls on their proprietors ^^
The court carried out the letter, but evaded the spirit of this promise,
by first making a call of 2e3 per cent, on the stockholders, and then
giving an option of discharging the call by the transfer of 50 per cent,
of the nominal stock, owned by each proprietor, to the company.
Practically the whole of the proprietors availed themselves of the
option, with the result that <£*675,000 stock (on which, as already
shown, only 10 per cent.Vas actually called and paid up) was trans-
ferred to the company 2. This arrangement was made on November
26th, 1720, and the governor and assistants endeavoured to sell the
stock, with the result that the price, which had fallen rapidly in view
of the proposed call, became still further depressed.

In several respects, this company was an unique product of the
South Sea period. The vicious system of finance of the disastrous year
1720 in most cases brought its penalty swiftly, but in this case it
required a long time to work out the fallacies and dishonesties involved.
In fact, such irregularities seem to have become an integral part of the
organization, and therefore, in spite of changes of management and
the lapse of time, the same errors were repeated with almost unfailing
regularity, when opportunity offered. Not only so, but this company
seemed unable to profit by the experience of its predecessors,
save by selecting for its imitation the worst financial methods and
neglecting the best. Therefore its subsequent history, while extending
into the nineteenth century, is in fact dominated throughout by the
least admirable commercial ideas of the seventeenth and early eighteenth
centuries.

Thus at the beginning of the year 1721, the York Buildings
company was in a crippled, but by no means hopeless position. It had
contracted obligations in the purchase of estates, which were beyond

1 Edinburgh Evening Courant, Sept. 8, 1720.

2 Murray, York Buildings Company, pp. 29, 30.

Div. xn. § 2 b] Finance by Lotteries 1721 427

the capital paid up on its stock. Against these liabilities, it had a
nominal capital of ^600,000, transferred to the company in satisfaction
of the call and available for re-issue, besides the 90 per cent, as yet
uncalled on the remaining stock, to meet its liabilities. After the
collapse of the South Sea company, while the measures of relief for
the sufferers were still undetermined and credit was most severely
shaken, it would have been a heroic measure to have enforced a call,
and possibly the necessity for a call might have been postponed, since
the chief creditor was the government. However the need for calling
up more capital does not seem to have been seriously considered, and
the first measure taken to meet the company ""s necessities was the usual
resort of an undertaking, that was supposed to be of public utility, in
the previous century, namely the raising of capital by means of lotteries.
It would be idle to condemn enterprizes such as the Virginia^ and the
Royal Fishery^ companies for adopting this resource, when the State at
a later date sanctioned and availed itself of the same expedient. But
there are lotteries and lotteries. Those conducted by the York
Buildings company in 1721 were based on the idea of procuring money
from the public at no expense, the prizes (like those of the Mine
Adventurers"* company^) being obligations and stock of the company.
The first lottery had for prizes, annuities on single lives, secured on the
estates of the company. The third and last offered, besides annuities,
stock in the company, as an inducement to adventure. Considering that
the stock was only partly paid, and that the company was known to be
in want of funds, its stock was a species of property that was only
suitable to certain classes of investors. So it is not surprising to find
that this lottery met with no better success than the others. Possibly
the most curious episode in the whole transaction is the fact that,
though the company had ^^600,000 stock in hand, available for issue
and subsequently issued, it was deemed advisable to purchase the stock
required in the marketM So, to induce the public to gamble in a
lottery, the company was itself gambling in its own securities. This
probably was connected with a reported attempt to depress the price
of the stock by a syndicate of brokers ; and, following the example
of the South Sea company ^ the court determined to support the
market. Their rivals proved stronger, and the result was a loss to
the company of nearly <^3,000. Closely related to the Stock Exchange
dealings was the payment of dividends out of capital, and this too
when it was known that the company was losing at the rate of ^4,000
a year.

1 Vide supra, ii. pp. 252, 253. . ^ Ibid., u. p. 373.

3 lUd., II. pp. 444-7.

4 Murray, Ywk Buildings Company, p. 31. ^ Vide supra, pp. 317-9.

428 The York Buildings Company [div. xii. § 2 b

So far, then, the efforts of the court, to secure fresh capital, had
only resulted in loss. In 1723 it was decided to issue the c£*600,000
stock, which had been accepted in 1720 in lieu of the call of 23 per
cent. In other words, the transaction of 1720 was equivalent to the
purchase of over <^600,000 stock at 23. It was now proposed to issue
it at 14, and so to pay nearly 40 per cent, for the placing of the issue.
A syndicate agreed to take up ^^61 9,800 stock at this price, and to pay
up by instalments. But, when £S had been paid on the new stock,
it was found that the old stock could be bought from 6J to 7. In view
of this, the syndicate decided to forfeit the money already paid, and
claimed to be released from their contract. Though the company
obtained some capital, it was much less than the amount needed, and
the withdrawal of the syndicate brought it "to the verge of ruin^"
Negotiations were next opened with the Charitable Corporation for the
Relief of the Industrious Poor 2, but without result.

The next step was one copied from certain not very creditable
proceedings of the Royal African company^. It would appear that,
in spite of the failure of the syndicate to take up the unissued stock,
a considerable amount of it had been placed, and in 1724 the nominal
stock seems to have been rather over a million. It was now agreed that
holders should transfer one-half of their stock, receiving in exchange the
company's 4 per cent, bonds. The effect of this device was to make half
the share capital a preferred charge on the assets. But there was a
further injustice to the creditors, in that, for the purposes of the
exchange, the stock was taken at 13 whereas it only realized 8 in the
market, so that, not only was there an unjust preference to the stock-
holders, but the court actually had the effrontery to magnify their
claims by no less than 62J per cent.^ Added to this, it was shown
in evidence before Parliament that " the books were kept with great
irregularity," and it was stated that, out of an estimated debt of about
d£*250,000, c£*132,060 had been issued "on pretended loans, by giving
bonds for double or treble the sum really lent, and some of them have
been issued without any consideration ^'"

Having exhausted for the time all methods of raising capital and
of juggling with the stock, the court turned its attention, somewhat
late in the day, to developing its various properties. Most of the
estates had been leased in large parcels to various persons, who sub-let
them to occupying tenants; and so, even had there been capital
available, the company had parted with the right of dealing directly

^ Murray, York Buildings Company, p. 33. ^ Vide supra, p. 380.

3 Vide supra, ii. p. 29.

* Murray, York Buildings Company, pp. 33, 34.

^ Reports from Committees of the House of Commons, i. pp. 585, 586, 657-9.

Div. xii. § 2b] Coal, Copper and Lead Mining 1728-32 429

with this part of its possessions. There remained, however, the water
supply undertaking, and a steam pumping-engine was substituted in
1725 for that previously in use^ This proved "chargeable'' and was
soon removed. Although the mains were extended, it was not long
before the bad management or ill-luck of the company affected its
business of supplying water, and in 1746 the works were leased at a
small rent. The next step was taken in 1727, when arrangements were
made, under the management of Aaron Hill, the promoter of the Beech
Oil company 2, for the purchase of timber at Abemethy with a view
to shipping it to England to provide masts for ships ^ Since this new
development was not authorized by the original patent and act, a royal
license was obtained on August 21st, 1728, permitting trading in goods,
wares and merchandize, produced in Scotland. This venture proved
unprofitable, and the court decided to start iron-works. The outcome
was the same ; and, by 1732, ^6,935. ^s. \\\d. had been lost ; besides,
as always happened in the history of this company, the failure to pay
notes issued when due. These disappointments were far from damping
the optimism of the governor and assistants. One of the estates they
had purchased had coal-pits and salt-pans. These were now worked,
as well as a glass factory, with the usual result of a loss, which by 1732
was 6^4,088. 17*. 5|d. Each successive failure seems to have made the
company more ambitious, and to have extended the scope of its
operations. The Panmure estates in Forfarshire contained copper and
lead mines, and these were developed from 1730. Besides, the court
believed that the high road to success lay in controlling all the lead
mines in Scotland, and those owned by Lord HopetounS which had
been worked successfully for many years, were leased. To these were
added other mines, belonging to Sir Alexander Murray of Stanhope in
partnership with a number of others, which were leased at a rental of
,^3,600 a year, subject to a royalty and the repayment of =£^6,000
expended by the proprietors. The full history of the granting of this
lease is a chapter which is little creditable to any of those concerned.
It involved dishonesty on the part of agents, wild speculation in York
Buildings stock, and illegal advances from the Charitable Corporation
for the Relief of the Industrious Poor^ The York Buildings company
spent some ^40,000 on its various mining properties, " but never drew
as much lead as would pay the wages of their workmen."

1 Maitland, History of London, p. 1274. ^ Vide supra, pp. 115-17.

3 Cf. infra, Division xiii., Nos. 49, 95, 99, 166, 179.

* Vide supra, ii. pp. 410, 411.

6 The whole complicated chain of events has been related with great clearness by
Mr David Murray in his account of The York Buildings Company, pp. 70-6. In the
same work the very intricate proceedings in the liquidation of the company are
explained.

430 The York Buildings Company [div. xii. § 2 b '

As already shown ^, in 1724 the company was in very serious financial
difficulties, and apparently the best it could do was to turn its stock-
holders into preferred creditors by converting stock into bonds. The
question then arises how was it able during the next eight years to find
capital to pay dividends intermittently, to carry on a timber business,
iron and salt-works, glass-works and mining? The answer, as might
have been anticipated, is that the company avoided paying when
possible, and when it was pressed it gave bonds. Still, no commercial
concern can be carried on by alternately refusing and then promising
to pay its debts, and some real capital was required. A part of this
was provided by the re-issue of ^200,000 of the stock in the possession
of the company in 1727 at 10^. In this way some of the more pressing
liabilities had been met, but the situation became serious, when the
interest on bonds amounting to ^71,206, issued in 1724, could not be
paid in 1727 and proceedings were threatened. The bondholders were
appeased until 1731, when actions were actually started against the
company. However, the court, though its pecuniary resources were
exhausted, had still some devices for staving off the inevitable failure,
and it was proposed to create ^£^1 00,000 5 per cent, bonds, giving an
option to holders of the 4 per cent, bonds of 1724 to exchange. In this
connection there was another "regrettable incident.'' The company
was so hardly pressed for money that a considerable quantity of the
5 per cent, bonds were disposed of, and therefore a sufficient amount did
not remain available to be transferred to holders of the 4 per cent,
bonds ^ There was something of poetic justice in the position of the
disappointed holder of the latter stock, since it will be remembered
he had exchanged a depreciated ordinary stock, at an inflated price,
for a prior charge, to which he was not entitled.

Payments on account of the annuities, created from 1720 onwards,
had long been in arrear; and, in view of these facts and the many
abuses in the conduct of the company's affairs, a petition was presented
to Parliament in 1732 praying for an enquiry. The old court had been
turned out, and the company was inclined to support the petition, with
a view to staying the actions impending. At the same time, some
attempt was made, but by means that had now become a matter of
tradition, to secure funds. A call of 3 per cent, had been ordered, and
it was promised that all, who paid half the amount by a certain time,
should receive ^^95,000 of the stock held by the company. " The new
governor and assistants, being then defaulters, had opposed the call, but
when they came into office they adopted it, and ultimately divided the

^ Vide supra, p. 428.

2 Murray, York Buildings Company, p. 63.

3 Ibid., pp. 79, 80.

Div. xn. § 2 b] Transforming Stock into Bonds 1724-34 431

stock amongst themselves and those who had paid the call, which was
equivalent to [a bonus of] llf per cent.^'"' In 1734 a call of «^1
per cent, was made, and a few months later it was decided to grant
to those, who had paid both calls, 3 per cent, bonds secured on the
waterworks. At the same time, the last great juggling with the stock
was attempted. Although the Parliamentary enquiry was in progress,
it was resolved to reduce the stock by one-half. Each holder was
authorized to transfer 50 per cent, of his holding to the company,
receiving in exchange bonds, taking the stock at 10, i.e. ,^^1,000 of stock
exchanged for ^100 in bonds. But the stock was selling from 2J to 3,
so that the effect of this device, if successful, would have been to
exchange an investment, worth £^1. \0s. in the market, for a bond
of a par value of d£*100. Naturally the creditors were indignant, and
a bill was brought forward in the House of Commons for declaring
the lately-issued bonds to be void. The court saw that the time for
transmuting stock into bonds was past, and the resolution was re-
scinded 2.

This was the last effort to secure the position of the stockholders
at the expense of the creditors, and at length the bankruptcy, that had
been so long in view, began. In 1740 an extensive suit was instituted
in the Court of Chancery, which was destined to continue, partly in
England, partly in Scotland, for over half a century. The company had
been contracting debts for twenty years, and it took sixty years to reach
the final liquidation.

The Court of Chancery determined how the creditors were to rank,
and claims were admitted to the amount of =£'115,320. 11^. M. An
order was made for the realization of the company's property; but,
since the jurisdiction of the Court of Chancery was confined to England,
this order only specified the Widdrington estate, situated in Northumber-
land. This property was sold, and the debt allowed by the Court of
Chancery was reduced to a principal sum of ^40,042. 13*. \0d.' The
Chancery claim was only a part of the total debt of the company,
and meanwhile there were dilatory proceedings by certain creditors in
the Scottish Courts.

It was not till 1756, that some real progress was made. In that
year, after repeated meetings of the different classes of creditors, an
agreement was made as to the order of claims, which enabled certain
estates to be sold^ This arrangement was confirmed by act of Parha-
ment in 1763. The sale took place in 1764, with the result that claims
amounting to ^110,000 for principal and interest were paid», and a

1 Murray, York Buildings Company , p. 84.

2 Ihid., pp. 85, 86. ' I^^'> P- ^7-

432 The York Buildiyigs Company [div. xii. §

balance of d^l 3,583. 5s. 6d. remained towards the payment of the
creditors on bond.

The debts still to be met were very large. The sum oi
.£'40,042. ISs. 6d. for principal, and ^8,705. 18^. 8d. for interest, rej
mained owing to the creditors on bond, and at least ^^5,250
annuitants. Other debts, on which adjudications had been ledj
amounted with interest to <i^360,000. In 1766 an attempt was mada
to advance the liquidation, by purchasing the whole ordinary stocl
at IJ per cent., or .£'15,000, and to extinguish the annuities, but th(
negotiations proved abortive \

In 1777 another act was passed to facilitate the sale of the estates,
and by 1783 the remaining Scottish properties had been sold, realizing
,^361,767. 13.y. 6j\d.^ But, although the sale had been finished, it
required twenty years to complete the division of the proceeds. First,
the company protested against the manner of the sales. Then there
were various intricate legal questions to be decided, as to whether
certain doubtful claims were to be allowed to rank in the final distri-
bution of the funds available. Some of the bonds, issued in 1724, had
since been dormant, others had been pledged ; and, as the price of a
6^100 bond had been as low as 5<y., there had been very many changes
of ownership. Both the bonds of 1724 and those that had been
pledged were allowed to rank for the full amounts. In 1786 an
agreement was made between the company and about one hundred
representative creditors, with the result that a large number of claims
were satisfied. In 1790 Robert Mackintosh, who was then governor
and who had framed the scheme of arrangement, withdrew his support,
and matters remained as before in respect to the remaining creditors.
Litigation began again, and continued till 1792, when a new agreement
was made, under which the company was to receive £^1 0,000 out of its
Scottish properties, certain investments in government stock and to
retain possession of the waterworks. The balance of the proceeds of
the land-sales, amounting at this date to .£210,000, was to be handed
over to the creditors. The latter, by an instrument known as "the
Restrictive Agreement,"" decided on the mode of division of the money
available amongst themselves, and this was finally confirmed in 1802 by
a scheme of division authorized by the Court ^.

The company now divided the funds, rendered available by the
agreement of 1792, amongst the stockholders and remained in possession
of its original property in the waterworks. This undertaking for over
half a century had been let on lease, and finally in 1818, on consideration
of an annuity of £*250. 18*. 6d. and certain other payments, guaranteed

1 Murray, York Buildings Company, pp. 95-7. ^ Ibid., p. 102.

3 Ibid., pp. 106-10.

Div. xii. § 2 b] Losses by Speculation 1720-1829 433

by the New River company, the whole water supplying business was
devised for 2,000 years from September 15th, 1818, at a pepperconi rent,
and m 1829 the York Buildings company was dissolved by act of
Parliaments

Thus after a corporate existence of nearly 140 years, during the
course of which the company had tried its hand at most of the then
known kinds of speculative enterprize, it came to an end having not
only paid its creditors— many of whom were stockholders or the repre-
sentatives of stockholders— but being in a position to distribute
something to the owners of its ordinary stock. Quite apart from the
diversity of the enterprizes of the company, its history furnishes a very
rare example of affording data for a calculation of the losses due to
ill-advised speculation. In making such an investigation, it may be
premised that the ultimate fate of any given ,£^00 nominal is somewhat
obscure. Obviously the final dividend from the arrangement of 1792
can have been very small indeed, and the capitalized value of the
annuity guaranteed by the New River company, if distributed over
the large stock, would have added but little. It is to be remembered,
however, that from time to time portions of the stock had been con-
verted into bonds, which were credited as paid in full; still, this
conversion, while effected at a price in excess of that in the market,
was less than the amount actually paid up. So that, even taking into
account the benefit of such conversions, it will be apparent that the
stockholders, besides receiving little interest on their investment,
obtained as a result of the liquidation considerably less than their
predecessors had paid up at the formation of the company in 1719
and had added later in response to the calls.

If, on the other hand, the undertaking had been prudently financed,
and speculation had been avoided, the venture would have yielded a
handsome profit. The industry of Mr David Murray enables exact
figures to be given both of the prices at which the estates were pur-
chased and at which they were sold. The total amount of the
purchases amounted to ^^308,913. 14^. Bd. This sum, however, was
subject to certain deductions, since a small estate, belonging to " Rob
Roy,'' for which £H^0 was paid, was either re-transferred to the
original owner or sold before 1740. There were other deductions of
^43,902. 0.9. 6jtZ., so that the price, actually bid to the Commissioners,
was diminished by .£'44,722. Os. Q^d., leaving a nett purchase price of
^264,191. 13.9. lOfd Since the company was formed at the end of
1719, there would have been little difficulty in obtaining this sum and
the £^7,000 required to complete the purchase of the waterworks. The
same properties sold for ^479,951. 6.9. O^'^., thus giving a profit of
1 iMurray, York Buildings Company, p. Ill ; vide supra, p. 29.

s. c. Ill, ^'"^

434 The York Buildings Company [div. xn. § 2

dg'^lSjTSQ. \^s. l^^., or over 80 per cent.^ The guarantee of
New River company, if capitalized at 28 years' purchase, would
equivalent to the original price paid for the waterworks, so that this
part of the company's assets may have been taken as having neither
made nor lost. ■

When it is considered that the attention of the court was divertecF
from the administration of its landed property by the need for giving
some attention to the many speculations in which the company became
involved, that during the greater part of its existence it was unable
through want of capital to develope the estates, and that finally these
estates were sold at a disadvantage — the fact that even under all these
disadvantages the lands sold for over 80 per cent, more than they cosi
shows clearly that, with prudent finance, the undertaking would havj
earned reasonable dividends, and its property would have incn
materially in value. In this respect, the position of the company
would have been similar to that of the Irish Society^, except that the
York Buildings company was much more favourably situated,
things turned out, the difference between the price at which the estal
were purchased and that at which they had to be sold was absorbs
in paying the principal and interest of various speculative losses. Thj
difference, between the probable value of the estates under a cautioi
but progressive management at the beginning of the nineteeni
century and the small sum actually paid to the owners of stock and
the holders of bonds exchanged for stock, represents the penalty pail
for a system of finance, sometimes dishonest and always injudicioi
conjoined with a disposition to enter into speculations, foreign to tl
main business of the company.

1 Murray, York Buildings Company , pp. 24, 102.

2 Vide supra, ii. pp. 339-42.

SECTION III. THE GOVERNOR AND COMPANY
FOR MAKING HOLLOW SWORD BLADES IN
THE NORTH OF ENGLAND (1691-1720).

A. The Sword Blade Manufacturing Company (1691).

This charter was used for three very different undertakings, namely
the making of sword blades, a land company and a banking company.
The original grant was dated September 15th, 1691, and arose out of
a petition presented by Sir Stephen Evans and a number of others,
which had been considered on the 1st of September. It set forth that
the petitioners had incurred considerable expense during the past two
years, in bringing from abroad and maintaining nineteen or twenty
families who were skilled in the art of making hollow (i.e. grooved)
sword blades. The promoters had also built mills and forges in
Cumberland and the adjacent counties. In view of these facts and
since no hollow sword blades had ever been made in England l>efore,
nor could they then be made except by the workmen employed by the
petitioners, a grant of incorporation and patent were asked for^ A
warrant was issued for the incorporation on September 15th of f/ie
Governor and Company for making Hollow Sword Blades in the North
of England. The members were entitled to elect a governor, a deputy-
governor and twelve or more assistants, five of whom were to constitute
a quorum. Besides the usual corporate privileges, the company was
authorized to use a distinguishing mark to differentiate the sword
blades, made in England, from those produced abroad. Any members
of the company, not paying calls when due, were subject to the loss of
the privileges of membership'^.

The company soon had sword blades ready to sell in London, and from
1692 to 1704 sales were advertized from time to time, at Cutlers' Hall,
Cloak Lane. In 1693, the court discovered that quantities of foreign

1 State Papers, Domestic, Petition Entry Book, i. p. 182 ; Calendar, 1G91-2,
p. 506; Anderson, Annals of Commerce, in. p. 121.

2 State Papers, Domestic, H. O. Warrant Book, vi. pp. 174-7; Calendar, 1G91-2,
pp. 521, 522.

28—2

436 The Sword Blade Company [div. xn. § 3

sword blades had been imported, and a reward of 5*. per doz. seize
was offered to anyone giving information, which would lead to th<
detection of the importers \ In 1703 the company''s warehouse was'
at New Street, Fetter Lane, and its mills at Shotley Bridge, near
Newcastle, and at that date one of the last sales of sword blade
was held, the company having embarked on a career of speculatioi
in land 2.

B. The Land Company (? 1702).

Anderson stated that the original manufacturing company " did no\
succeed as was expected ^" but it is recorded that, as late as 1703i
a dividend of 4 per cent, was paid^. It is somewhat doubtful, too^
whether he is correct in saying that the original proprietors "sold or
assigned their patent to another company of merchants in London."
Anderson seems to have been misled by the inclusion of " the making
of sword-blades'"* amongst the projects mentioned as failures by the
author of Anglioe Tutamen^. But the "person of honour*" who wrote
this treatise was inclined to be pessimistic ; and, whether the Sword
Blade company was successful or not, it managed to keep its works
open. It is possible that in the first years of the eighteenth century
the old company may have sold its patent and works to the new one,
and that the latter carried on the original business, as well as their
dealings in land, just as the York Buildings company after 1719 carric
on the waterworks^. However this may have been, the company aftc
1702 entered on a new era in its history. There had been a coi
siderable amount of discussion, both in Parliament and in various^
publications, as to the policy of dealing with forfeited estates in Ireland.
At first these had been disposed of by grants from the Crown, but it
was contended such grants should be " resumed " and the lands sold for
the benefit of the public, in order to reduce the debt occasioned by the
military operations in Ireland after the Revolution'^. At length on
July 16th, 1702, it was announced that the forfeited lands would be

1 London Gazette, No. 2913. 2 75^^^ ^o. 3972.

3 Annals of Commerce, iii. p. 121. * London Gazette, No. 3958.

5 p. 21. 6 YidQ supra, pp. 423, 432.

^ A Discourse upon Grants and Resumptions, by the author of the Essay on Ways
and Means [C. Davenant], 1700, pp. 387-448 ; The Exorbitant Grants of William II L
Examined and Questioned, London, 1703, passim ; The Secret History of the Trust ;
with some Refections upon the Letter from a Soldier. In a familiar Discourse between
J. Truncheon, Esq., and Mr Inquisitive, London, 1702, pp. 15-23; An Argument
proving that it is more to the Interest of the Government and the Nation of England that
the forfeited Estates in Ireland be purchased by an Incorporated Company than by single
Purchasers [by J. H.], Loudon, 1701 [Brit. Mus. 8225 . c . 44].

Div. XII. § 3 b] Asa Land Development Company 1702 437

sold on October 20th and following days\ The company, that then
owned the Sword Blade charter, decided to come forward as a purchaser.
As the amount required would be large, the question naturally suggests
itself as to how the court proposed to raise the capital required. The
method adopted was that of the Bank of England, the Million bank
and a number of other undertakings of the period. The great want
of the time was actual cash ; and, since the government would accept
payment in its own obligations, it was decided that the company should
invite persons, holding Army Debentures, to subscribe these, receiving
the company'*s stock in exchange, while the Debentures were returned
to the State, in payment of the purchase-price of the estates. By
June 25th, 1703, ^150,000 of Debentures had been subscribed, and
a fresh subscription was taken 2. In all, estates, returning ^^20,000
a year, were purchased^, including widely scattered lands with a very
extensive acreage'*.

The inducement for persons, holding Army Debentures, to exchange
them for Sword Blade stock was that they replaced a government, by
a landed security — the latter being generally held more desirable at the
beginning of the eighteenth century. Interest on the various government
debts was often in arrear, and the rents from the Irish estates ought to
have provided an income, at least not more uncertain. From the point
of view of the security of capital, the scheme seemed equally promising.
The forfeited estates were being disposed of by a forced sale, and it was
only to be expected that, with more settled political conditions, the land
would increase in value. On the other hand, the Army Debentures
were below par, and therefore it would seem to be wise to exchange
a depreciated security for one which would be likely to improve in price.
Such a calculation was on the whole borne out by the quotations of the
two stocks— " Sword Blades" (which soon became known as "Irish
Lands") touching 91f in 1704, whereas the highest price of the
Debentures was only 85, on the other hand the former stock fell rather
lower than the latter, so that the average price of the year was
practically the same— 81/^ for Sword Blade stock and SIJ for the
unconverted Debentures.

1 London Gazette, No. 3828. ' DaUy CaurarU, No. 371.

3 Anderson, Annals of Commerce, in. p. 121. ^ r.-

4 A List of the Estates in Ireland belonging to the Governor and Company for making
Hollow Sword-Blades, with the number of Acres in each, according to the Survey of the
late trustees for the sales of forfeitures and also the ^^"'^^//^^/^f ;'";^.^*";^^;
Dublin, Printed at the Sign of the Cock [1709] [Library Trm. Coll Dubhn, Pre^s
A . 7. Ill; The Report of the Commissioners appointed by Parliament to emmre into
the Irish Forfeitures, 1700; Jv. Regium: or the Kings Right to g^-ant ^^^^^^"-^
1701; A Letter from a Soldier to the Commom of England, 1702, in Ha^e Tracts
published during the reign of William III., m. pp. 704-87.

438 The Sword Blade Company [div. xii. § 3 b]

Difficulties soon began to arise. On February 14th, 1704, the
company stated in a petition that other purchasers of forfeited landa
had at that date only paid one-third of the price. Some of them were
anxious to borrow the money necessary to complete the transaction, and
the company was willing to lend it on the security of the estates. But,
in case such pledged properties reverted to the company, the court waa
in doubt whether it was legally entitled to accept conveyances from any
other persons than the Trustees for the sale of Forfeited Estates, and
it asked a license from the government, enabling it to do so^ The
English Parliament, being desirous to dispose of the lands, endeavoured
to facilitate the transference of them to the company, but the Irish
Parliament viewed the whole proceedings with little sympathy. Already
many English corporations and individuals had secured land in Ireland
— from the establishment of the Irish Pale, the various plantations of
Ulster, down to the time of the Cromwellian Settlement. It had
frequently been said that the " Anglo-Irish,""' or the descendants of
English immigrants, were opposed to fresh importations of either
capital or energy. Therefore, the Irish Parliament placed difficulties
in the way of the company, and it was found that a complete title
could not be obtained. These facts reacted on the prospects of the
undertaking, and the price of the stock began to fall. Throughout
the year 1705, the quotation fell steadily, till it was no better than
57 on December 5th, as against 79 for unconverted debentures. In
the following year the extreme prices were 72 J and 57 J, in 1707
65f and 55.

Meanwhile the loans, made to other purchasers of Irish estates in
1704-5, had suggested a new class of business. Not only was money
advanced, but notes were issued and cash received on deposit'', and it
was alleged that this company had aided a run made against the Bank
of England^. When the bill was drafted for restraining all corporations
from banking, with the exception of the Bank of England, this under-
taking protested vigorously, urging that the competition of the two
companies had resulted in bringing interest lower than it had been
since the Revolution*. This protest was ineffectual, and the Sword
Blade undertaking was debarred from banking, as a corporation,
after 1708.

1 State Papers, Domestic, Petition Entry Book, vi. p. 148.

2 Some Reasons against the Clause for Restraining all Corporations hut the Bank
of England from keeping cash or borrowing money payable at Demand [1708]

[BHt. Mus. ^-H^].

3 Anatomy of Exchange Alley, 1719, in Chronicles of the Stock Exchange, by John
Francis, p. 376.

* Some Reasons, ut supra.

Div. xn. § 3 b] Results of Speculation in Land 1704-12 489

The company was thus thrown back on its land-development enter-
prize, and it had purchased estates to the value of ^208,867. 5s. lO^d,
besides paying off encumbrances amounting to upwards of d^60,000\
Feeling in Ireland was opposed to the corporation, and suits were
started against it in the Irish courts on the question of title. The
company contended that the act of the English Parliament guaranteed
it a clear title, irrespective of the original deeds, and a further act was
passed in its favour ^ ; but the Irish House was hostile ; and, in 1708,
it was known that it would not suffer the company to enjoy the estates,
unmolested, whereupon the stock fell to 51. During the next four
years the lands were being resold and the company wound up. There
was some improvement in the market for the shares, which touched
69 on March 1st, 1710, but fell to 52 in July and August 1711.

A Comparison of the Prices of " Sword Blades " Stock and
Army Debentures.

Date of Highest
Price

1704, March 13

1705, March 26

1706, May 29—31

1707, April 16,
August 4

1708, April 26

1709, Sept. 8

1710, March 1

1711, Jan. 3,
March 12

1712, March 14
to June 7

Sword Blades Stock,

Highest and Lowest

Prices

91|— 72
83|— 57

65|— 55

591—51
68|— 53
69—591
60—52

60—58

Date of Lowest
Price

Nov. 10
Dec. 5
Jan. 18

Nov. 19

March 29
April 21
Nov. 15
July 13 to 23,

Aug. 30
Feb. 15 to 22

Army Debentures,

Highest and Lowest

Prices

85—78^

" 79

91— 82i

91—861

88i— 84|

80|— 72

93|— 73^

89—84

The final cash distribution appears to have worked out at about
59— the price, in 1712, being 58 to 60— while the price of the De-
bentures about the same time varied between 93^ and 73|^, so that the
speculation had proved unfortunate for those who subscribed. This
result is to be ascribed to the hostility of the Irish Parliament ; indeed,
one of the grounds on which its action was based (namely that the
estates had been purchased at an abnormally low rate) should have
made for the success of the company, had it been given a free hand
and provided its management had been successful. In the history of

1 The Case of the Governor and Company for making Hollow Sword-Blades in
England (Guildhall Library), printed partly in Fire Insurance Companies, by F. B.
Relton, London, 1893, pp. 127 128.

2 6 Anne, c. 34.

[^3b

440 The Sword Blade Company [div. xii.

the joint-stock movement, the career of this land-enterprize is an
interesting companion picture to that of the York Buildings company.
In both cases charters were diverted from the original purposes for
which they were granted ; both bought forfeited estates, the one in
Ireland, the other in Scotland and England; both were unsuccessful.
Here the parallel ends, for the depreciation in the case of the Irish
company was due to the anomalous relation of the English and Irish;
Parliaments, that of the Scottish company to the speculation in which
the court engaged from its foundation till there were no longer funds j
remaining with which to speculate.

C. The Banking Partnership. Elias Turner, Esquire,
AND Company, or the Sword Blade Bank (?1712). ^\

strictly speaking this enterprize, for which the charter was next
used, falls outside the limits of the present work, since the final phase
of a diversified career relates to a partnership, rather than a company.
However, this last stage is so closely related to the fortunes of the
South Sea venture that it will be convenient to add some account
of the Sword Blade bank. In fact the enterprize carried on from 1704
to 1711 was very closely connected with the South Sea company in
many respects, and the latter may be considered from one point of view
as the continuation of the former. In both there was the same idea
of converting government debt into the stock of a trading company,
and it may have happened that some of the securities, released by the
sale of the Irish estates, were re-subscribed at the floatation of the
South Sea company. It was undoubtedly the experience gained in
the earlier undertaking by Elias Turner, Jacob Sawbridge and Sir
George Caswall which aided in determining many of the financial
methods of the later one. These three were in partnership in stock-
exchange transactions, and they were described as "having so many
bear-skins pawn'd to them at a time, so much stock deposited with them
upon bottomree, as it might be called, that indeed they may be calPd
the city pawnbrokers ; and I have been told, that they have fifty stock-
jobbers and brokers bound hand and foot and laid in heaps at their
doors at a time^" The partners were left with the Sword Blade charter,

^ Anatomy of Exchange Alley, ut supra, p. 377. In this passage the early use of
the term ^^bear" is interesting^ cf. Chimera (1720), p. 18, "the first bite Mr Laws
may be said to have put on the country was to give out by way of premio ten thousand
pistoles or thereabouts at the rate of — per cent, for the refusing of Mississippi or
West India stock, now subscribed and full, at 100 livres each action for a year's
time: This was what we call the buying of the bear-skin and was a dear bear-skin to
those that sold it, as we shall hear presently." A '^^bear" of stocks was described
as "a bear-skin man," Anatomy of Exchange Alley, ut supra, p. 378.

Div. XII. § 3 c] As a Banking Partnership 1712-20 441

after the land undertaking was wound up, and they used it to re-
commence banking of a somewhat speculative character. Two of them
(Sawbridge and Caswall) were directors of the South Sea company, and
their bank, now known as that of the Sword Blade, became the " cash-
keeper" of the former. In the Anatomy of Exchange Alley there
appeared the following description of this trio. "C[aswall], a man
of brass sufficient for much more business than he can be trusted with...
he rather is directed than directs, and, like a certain great general,
famed for more fire than flegm, is fitter to drive than to lead. S[aw-
bridge] has twice the head but not half the business as C[aswall] is said
to have....S[awbridge] is as cunning as C[aswall] is bold, and the reserve
of one with the openness of the other makes a compleat Exchange
Alley man....T[urner], a gamester of the same board, acts in concert
with C[aswall] and S[awbridge] and makes together a true triumvirate
of modern thieving: he inherits the face of C[aswall] with the craft
of S[awbridge], but seems to take state upon him and acts the reserved
part more than either ^^ The citation of these extracts is an exception
to the rule, observed elsewhere in this work, of refraining from quoting
scuiTilous contemporary judgments on individuals ; but, in this par-
ticular case, the conclusion of the estimate of the partners in the Sword
Blade bank, published in 1719, constitutes such a remarkable prophecy
of the events of the following year that the foregoing passages are
necessary to give point to it. The writer concludes: "The truth is,
it has been foretold by cunning men, who often see what can't be hid,
that these men by a mass of money, which they command of other peoples
as well as of their own, will in time ruin the jobbing trade. But 'twill
be only like a general visitation, where all distempers are swallowed up
in the plague, like a common calamity, that makes enemies turn friends
and drowns lesser grievances in the general deluge^."

There can be little doubt that the knowledge of market-manipu-
lation, attributed to the partners, helped to determine the direction
of South Sea finance. They were in the inner councils of the directors ;
and it was by their aid that some of the most secret portions of the
scheme of inflation were carried out^ It follows that all the most
profitable portions of the gi-eat conversion were reserved for the Sword
Blade bank, and its bonds or notes were issued for the part of the
price, fixed for the annuitants, which was to be paid in "cash." On
June 25th, 1720, a new partnership was formed by the inclusion of
Henry Blunt— a son of Sir John Blunt, one of the leading directoi-s
of the South Sea company— and Robinson Knight, a nephew of Robert

1 Chronicles of the Stock Ea;change, by John Francis, p. 376.

2 Ibid., p. 378.

3 Vide supra, pp. 340, 341.

442 The Sword Blade Company [div. xii. § 3 (

Knight, the secretary \ During the height of the boom, the Swore
Blade bank commanded immense influence ; but, when the fall began
its position was endangered, and on September 24th, it was forcec
to suspend payments The complicity of the partners, in many of th^
most discreditable episodes of the conversion, occupied much of tlu
attention of the Committee of Secrecy, appointed by the House o!
Commons; and it was discovered, as that enquiry progressed, tha4
many of the books and documents of this bank had been destroyed
or tampered with^. For this reason those members of the firm, who
were also directors of the South Sea company, would have been severely
dealt with, were it not that they had given some assistance to the
Committee, when enough was found out to make further disclosures
inevitable.

* Journals of the House of Commons, xix. p. 430. m

2 Historical Begister, v. p. 378. After the suspension of payment in 1720 business
was resumed by John Caswall and John Mount. This firm continued till 1742 when
it failed — A Handbook of London Bankers with some Account of their Predecessors the
early Goldsmiths, by F. G. Hilton Price, London, 1890-1, pp. 27, 28.

3 Vide supra, p. 345 ; also the Reports of the Committee of Secrecy in Journals of
the House of Commons, xix. pp. 425-51, 513, 519-22, 524, 555-6, 561-2, 568-78,
593-6.

DIVISION XIII.

LIST, ARRANGED CHRONOLOGICALLY, SHOWING
THE NEW SCHEMES OR OLD UNDERTAKINGS
REVIVED, FROM SEPTEMBER 1719 TO THE
END OF AUGUST 1720.

Div. XIII.] Promotions of the South Sea Period 1719-20 445

Dec. 28

No.

Description

Where the

subscription

was taken

Capital

The Colour Mill company.

The company for improving the Royal

Fishery of Great Britain.

[First subscription on Sept. 19^ 1719.

By March 8th tlie nominal capital

was increased to £8^000^000 and by

April 1st to £10,000,000.]

The company united to encourage the

manufacture of Great Britain.
The Grand Fishery.
[The first subscription proposed divid-
ing the capital offered as to £800,000
for England and £200,000 for Scot-
land. More would have been taken
up in Scotland, and accordingly an
additional £500,000 was offered.]
The land undertaking of the York
Buildings company \mde supra, p.
423].
Company for the insurance of ships.
[Ram's'first marine insurance.]

Company for the insurance of ships.
[Colebrook's first marine insurance.]
Company for raising a sufficient sum
to purchase estates, as a fund to
secure payment of annuities for life
and insuring lives.
Company for insuring ships and mer-
chandize.
[This was an amalgamation of the
marine insurance companies, al-
ready promoted by Ram and Cole-
brook. The sums, paid on applica-
tion, were ''permits" to secure
allotments in the combined under-
taking. This was the basis of the
company incorporated in 1720 as
''the London assurance," vide
supra, pp. 399, 400.]
Company for insuring ships and mer-
chandize.
[Promoted by Shales, vide supra,
p. 401.]
A joint-stock to lend to such persons
as shall have occasion to borrow
money on bottomry.
A stock for paying annuities and troni
thence to raise a further sum ot
£35,000 to be employed in trade.
Company for assuring the proprietors
of the tickets in the government
lotteries.

Colour Mill House, I
South wark.

Tom's Coffee House
or the Naked Boy
and Mitre, Garra-
way's,The Marine.

Rainbow Coffee

House.
Carolina Coffee

House.

Mercers' Hall.

10,000,000

100,000
1,. 500,000

200.000

Stephen Ram's 1 l,200,fKX)
office, Lombard j
Street. j

1 1,000,000

i
Gar ra way s. j

Marine Coffee
House.

2.000,0(K)

Pewterers' Hall.

.(>rM>.0<H)

The Cross Keys and I 1 ,000,000
Bible in Coniliill.

John's Coffee House
in Lombard St.

Mercei-s' Hall.

10<XO0(>

120,000

446 Promotions of the South Sea Period 1719-20 [div. xni.l

Date when the

Where the

subscription

No.

Description

subscription

Capital

was opened

was taken

1720

Jan. 14

The British Fishery.
[Subscription money was returned by
order of the House of Commons,
April 26th.]

John's Coffee
House.

1,500,(

Jan. 15

Company for establishing the British
Fishery.
[On January 15th £1,500,000 was

Garraway's.

3,000,000

subscribed and on February 4th an

additional £1,500,000.]

Jan. 19

Stock to be employed by way of loan
on stocks, annuities, tallies, orders.
Navy Bills, Debentures, &c. at legal
interest.

Gari-away's.

1,200,(«

Jan. 28

Stock to be employed in government
securities^

Mercers' Hall.

1,000,000

Jan. 29

The undertaking, for raising the growth
of raw silk, under a patent [dated
May 23, 1717J.

Marine Coffee
House.

1,000,000

Feb. 5

The annuity company for purchasing
government securities, granting an-
nuities for life and lending money to
merchants to pay their duties to the
Crown.
[Baker's Annuities.]

Garraway's.

l,500,0a

Feb. 8

A Fund for granting annuities, by way
of survivorship, and providing for
widows and orphans.
[Promoted by Burgess.]

Rainbow Coffee
House.

1,200,0Q|

Feb. 8

The Grand Lessees of the governors,
assistants and societies of the City of
London of and for the Mines Royal
and the Mineral and Battery Works,
for purchasing, smelting and refining
copper and other ores and for making
part thereof into brass.
[The charters of the Mines Royal and

the Mineral and Battery Works

had been purchased by a mari^ie

insurance company later incor-

porated as " the Royal Exchange,"

vide supra, p. 402. This promotion
appears to be an attempt to utilize
the charters for their original pur-

pose by an independent under-
taking.]
A joint-stock for building and buying

Feb. 11

Garraway's.

1,200,000

ships to let or freight.

Feb. 15

A fund for insuring houses and goods
from loss by fire.
[Promoted by Overall.]

Sam's Coffee House.

1,000,000

Feb. 16

A general insurance of houses and goods
from fire throughout England.
[Promoted by Ram and known later,
from the place of meeting, as the
Sadler s' Hall Insurance ; this under-
taking was transferred to the Royal
Exchange company, vide supra.

Marine Coffee
House.

2,000,000

p. 408.]

Div. XIII.] Promotions of the South Sea Period 1719-20 447

Date when the
mbscription
was opened

No.

Description

Where the

subscription

was taken

Capital

Feb. 16

Feb. 17

Feb. 19
Feb. 19

Feb. 20
Feb. 20

Feb. 22

Company for insuring houses and goods
in any part of England from loss by
fire.
[Afterwards described as the British
Insurance Fire Office from Fire.']
Company for settling and carrying on
a trade to Germany.
[Shareholders in the fund for selling
annuities, settling jointures [.''com-
pany floated February 8th] were to
have preferential allotment of
£600,000 for the first two days of
subscription. ]
The Sword Blade Fire Office for in-
suring houses, household goods,
utensils.
[So called from its place of meeting at
the Sword Blade Coffee House.
Subscriptions were returned on
February 29th.]
Company for insuring houses and goods
from loss by fire in any part of
England.
[Afterwards described as the Rose Fire

Office.]
Company for insuring houses and goods

through all parts of Great Britain.
Company for the immediate and effec-
/ tual carrying on of the undertaking
business, for the furnishing of
funerals to any part of Great Britain.
Company to buy and sell estates,
government securities, public stocks,
and to lend money on any real
security, or to trade in any way the
company shall think fit.
A joint-stock for the immediate, ex-
peditious and cleanly manner of
emptying necessary houses through-
out England, whereby very great
advantages will accrue to the company
in general by making large quantities
of saltpetre', besides other conveni-
ences for the benefit of the pro-
jectors.
Company for insuring against losses by
house-breakings and robberies on
the high-way.

[Subscription, announced for 22nd,
was postponed till 29th.]
Company to revive the Greenland whale
fishery, and for the immediate and
effectual carrying on of the said
fishery.
[Tlie subscription was limited to
£1,500,000, which was over-sub-
scribed, and on February 23rd the
capital was increased.]

Three Tuns Tavern.

Rainbow Coffee
House.

£
2,000,000

1,200,000

Union Coffee
House.

Marine Coffee
House.

Swan and

Rummer.
Fleece Tavern

House.

Ship and Castle.

Mercers' Hall.

1,000,000

2,000,000
1,200,000

3,000,000
2,000,000

Swan Tavern.

Marine Coffee
House.

1,000,000

2,000,000

448 Promotions ofthe South Sea Period 17 1^-20 [div. xm!

Date when the
subscription
was opened

No.

Feb. 22

Feb. 22
Feb. 23

Feb. 23
Feb. 23

Feb. 23

Feb. 26

Description

Company for a constant trade for ready
money between Great Britain and
Ireland and the Kingdoms of
Portugal and Spain.
Company for insuring ships and mer-
chandize.
Company to purchase unredeemable
annuities and other securities, for
granting annuities on lives at the
rate of 4 per cent, for the first year,
5 per cent, for the second, and so
on, advancing 1 per cent, every year
successively during the lives of the
annuitants.
The Globe Fire Office, for insuring
houses, household goods, wares and
merchandize from loss by fire.
Company for carrying on a trade to
Germany.
[A short treatise was to be published,
showing the nature of the trade
intended. ]
Company for carrying on a coal trade
from Newcastle to London.
[It was estimated that the proposed
company, by preventing " the pre-
judicial combination of private coal
traders," would save consumers 6 per
cent, to 8 per cent, and would make
8 per cent, per annum on the paid
up capital.]
Company to develope an invention,
patented in the reign of Anne, for
making salt in all parts of England,
far more expeditiously and at less
expense than by any other method.
The proposed capital was divided
into 1,100 shares of 1,000 each,
60 per cent, was to be paid on appli-
cation, out of which 1*. per cent,
was payable to reimburse the charges
of the patent. No one might apply
for more than six shares.
[There were several inventions for
improvements in the manufacture
of salt from 1700 to 1715, in 1708
Samuel Schmettau petitioned for
protection of an improved method
for boiling salt by coal, on
December 11, 1711, G. Campbell
of Edinburgh presented a petition
also for a patent, and another was
asked by Thomas Sliford and John
Hodgson on January 20, 1714 —
State Papers, Domestic, Petition
Books, VII. p. 402; xii. p. 188;
XIV. p. 30.]

Where the
subscription
was taken

John's Coffee
House, Exchange
Alley.

Sam's Coffee House.

Mercers' Hall.

Ship and Castle.

Virginia Coffee
House.

Sam's Coffee House.

Capit

1,000,

1,000,00<
1,000,00<

Garra way's Coffee
House.

2,000,00C
1,200,000

2,000,000

1,300,000

Div. XIII.] Proinotions of the South Sea Period 1719-20 449

•ate when the
ubscription
was opened

No.

44
45

54
55

Description

A stock for preventing and suppressing
thieves and robbers and for insuring
all persons' goods from the same, and
also from fire and other casualties
both by sea and land.
[Maximum subscription £20,000,
minimum £500.]

Issue of 10,000 new shares by the Royal
Lustring company making, with
2,400 old shares, 12,400 shares [vide
supra, p. 88].

Stock for importing rough diamonds.

Company for improving and carrying
on the African Trade.

Company for the more effectual carry-
ing on of the Newfoundland P'ishery.

"The New Britannia company of mer-
chants and others trading in and for
metals, minerals and mineral works,
for the discovery of metallic bodies
of which gold and silver are the chief,
which are well-known to the pro-
moters to abound in New Britannia,
but are unknown to the natives there."

Joint-stock for remitting money to and
from the principal trading places in
Great Britain and Ireland and foreign
parts and for the assuring of debts.
[Preferential allotments to the share-
holders in the York Buildings
company.]

Co-partnership for the importation of
timber from Norway and Germany.

Company for carrying on the patent,
lately granted, for glazing and paint-
ing stone to endure the fire.

Company for carrying on more effec-
tually a trade to Scotland and Ireland
in the linen manufacture.

Company for the whale, cod, mackerel
and herring fishery on the coast of
Newfoundland and North Carolina;
or the Grand American Fishery.

Company for improving and more
effectually carrying on the salmon
fishery on the coast of Newfound-
land.

Company for the African trade.

Company for working iron and copper
ores in America.

Company to provide a sufficient stock
for working iron and copper ores in
America.

Where the

subscription

was taken

Cooper's Coffee
House.

The (Company's
House in Bell
Allev.

Lloyd's Coffee
House.
Ship Tavern.

Antwerp Tavern.

Capital

2,000,000

1,240,000

1,000,000
1,000,000

Salter's Hall.

Sam's Coffee House.

Nando's Coffee
House.

John's Coffee
House.

Ship and Castle
Tavern.

White Lyon
Tavern.

Ship and Castle.
New England

Coffee House.
New England

Coffee House.

1,000,000

1,500,000
1,000,000

1,000,000
1,000,000

2,000,000

S. C. III.

450 Promotions of the South Sea Period 1719-20 [div. xi

April 20

3) 33

33 21
33 33

33 22

„ 23

. 27

60
61
62

63
64

65
66
67
68

Company for erecting Lumber [i.e.
Lombard] offices in and about the
cities of London and Westminster,
for lending of money by the month
on plate, watches, jewels or any
other goods honestly come by, at a
moderate rate.

Company to trade to "Argin" (for
gum arable, ambergris, ostrich
feathers) and to the Isle of May (for
salt).

^^ K proposal by several ladies and
others to make, print and paint and
stain callicoes in England and also
fine linnen as fine as any Holland to
be made of British flax... they are
resolved as one man to admit no man
but will themselves subscribe to a
joint-stock to carry on the said
trade."
[Subscribers must be women dressed
in calico.]

A co-partnership for traffic to and from
Portugal.

Company for carrying on a trade to the
Bay of Cam peachy.

A new manufactory of butter formed
in connection with the fishery and
salt promotions, "to supply effec-
tually the fish with sauce."
[The promoter reserves £50,000 and
subscriptions are limited to those
holding fishery shares.]

Company for the African trade.

*^^ Company to establish colonies and
settle a trade in New Britannia and
other parts, where gold and silver
do abound."

^'A mutual subscription for cariying
on a trade to Africa and America. "

The new undertaking of the whale
fishery at Davis Straits.

Company for the encouragement of the
woollen manufacture.

Company for carrying on a trade to
Russia.
[Linen drapers to have preference as
subscribers.]

The Globe Fire Office.

Company for promotion of trade with
Barbary, " which would sell 10,000
pieces of woollen cloth and the other
woollen manufactures and preserve
our countrymen from being carried
into slavery."

Sam's Coffee House.

John's Coffee
House.

The China Shop in
St Martin's, near
St Paul's.

Virginia Coffee

House.
Virginia Coffee

House.
Robin's Coffee

House.

Salutation Tavern.
Mulford's Coffee
House.

King's Arms
Tavern.
Three Tuns.

Virginia Coffee

House.
Globe Tavern.

Ship and Castle
Tavern.
Half Moon Tavern.

1,000,

1,000,0(

1,000,00
1,500,00
2,000,00

1,000,00

2,000,00
1,000,00

2,000,00

Div. XIII.] Promotions of the South Sea Period 1719-20 451

No.

72
(

74
75

81
82

83
84

87
88

Description

Company for carrying on the manu-
facture of sail-cloth.

Company to prevent the smuggling of
wool.

Company for advancing money by loan
to the government, and for carrying
on the insurance of ships.

Company for buying the goods of bank-
rupts to sell them by auction.

Company for the fishery in the eastern
parts of New England, Annapolis,
Cape Sable, Newfoundland or any
other part of America.

Company for working ^^a newly in-
vented water engine."

Company for the more effectual carry-
ing on and improving of the beneficial
glass trade in all its branches.

Company for carrying on the business
of making and tinning iron plates in
Great Britain.

The Pennsylvania Society for raising
hemp and flax and importing timber
and deal boards.

A co-partnership for purchasing stocks,
farming turn-pikes and renting
wharfs.

Co-partnership for draining fenny
lands.

Society for the assurance of mariners'
wages in the merchant service, and
for advancing money on the pay of
those in his Majesty's service at a
low premium to prevent the abuse
of extravagant discounts.

Undertaking to prevent the export of
wool into foreign parts.

Co-partnership for making calico in
Great Britain and encouraging the
growth of cotton in the plantations.

Company for grinding all sorts of wood
dry, for the use of dyeing.

''The Pennsylvania, Annapolis, Royal
South and North American Society,"
for the improving of flax, hemp,
sugar and the importing of the same
with timber and deal boards, also
exporting home products to these
plantations.
[Capital divided into 2,000 " parts or
premiums" of £1,000 each.]

Company for planting hemp in Scotland
and Ireland, for making sail-cloth.

A combination of persons of credit in
the hop trade.

Where the

subscription

was taken

Globe Tavern.

Wicar's Coffee
House.

Salutation Tavern.

Marine Coffee
House.

Ship Tavern.
Ship and Castle.
Ship Tavern.
Sam's Coffee House.

Will's Coffee
House.
Sam's Coffee House.

Salter's Hall.

Waghorn's Coffee

House.
Marine Coffee

House.

Blackmore's Head,

Lombard St.
Ship Tavern.

Capital

£
4,000,000

1,500,000

3,000,000

3,000,000
2,000,000

2,000,000

29^2

452 Promotions oj the South Sea Period 1719-20 [div. xm.

Date when the
subscription
was opened

May 30

)} ))

„ 31
June 1

No.

89
90

93
94

97
98
99

Description

yy
yy

100
101

102

103

104

106

A co-partnership for refining sugar.
Company for purchasing tracts of bog
in Ireland to drain them and to
purchase other improveable estates.
Company for making calico and muslin
and improving cotton and wool in
the plantations.
Company to insure effects and money
against robberies and embezzlement
on the roads^ and houses and goods
from fire.
Company for establishing a coral fishery
in the Mediterranean, and making
calico in England.
Proposal for traders in, and consumers
of paper, to combine for a joint-stock
to carry on the manufacture of the
same.
Company to carry on a trade from
Scotland for importing all manner of
naval stores, as masts, timber, deal
boards, turpentine, pitch, tar, &c.
Company for the cotton manufacture

in Lancashire.
Company to trade in hair.
Company for settling the Tortugas.
Company for the better promoting and
increase of the American trade, the
building of ships and importing of
timber.
Company for the purchase of estates.
Company for the supply of all kinds of
grass-seeds and the changing of seed-
corn.
Company for the improving and making
of starch in Great Britain.
[Subscription money was returned
July 14th and 15th.]
Company for the improvement of woad
and the better encouragement of
dyers.
Shares in an engine for clearing sand
from rivers and harbours, which
works from 9 ft. to 27 ft. under
water, taking up 70 tons of soil an
hour.
Company for selling by commission of
2^ per cent, all kinds of woollen
goods, and for making loans to
manufacturers at 5 per cent, on the
security of their goods, also the
discounting of their trade-bills and
the insuring of debts.
Company for trade into the River
Orinoco.

Where the
subscription
was taken

Fountain Tavern.
King's Head
Tavern.

Bull Head Tavern.

Ship Tavern.

Fleece Tavern,
Waghorn's Coffee
House.

Castle Tavern.

Virginia Coffee
House.

Ship Tavern.

Garraway's.

Sam's Coffee House.
Marine Coffee
House.

Golden Ball.

Cross Keys Tavern.
Salutation Tavern.

Sam's CoffeeHouse.

Capital

3,(

2,000,(

Waghorn's Coffee
House.

4,000,0

5,000,0

2,000,0*
1,000,0(

10,000,0(

Div. xm.] Promotions of the South Sea Period 1719-20 453

No.

107

108

109

110

111

11:

118

114

Description

115
116
117

118

119
120

121

122
123

Where the

subscription

was taken

Company for the planting and manu-
facture of madder in Great Britain.

Sharers in the tin and lead mines of
Derbyshire and Cornwall.

Company for making English pitch
and tar.

Company for improving and carrying
on the woollen manufacture, making
felt hats, also glass and lead pantiles
as effectually as those produced in
Holland and Germany.

Company for the importation of Swedish
iron.

Company for extracting siher from
lead and other metals.

Company for carrying on a trade in
rock-salt.

"The Grand Dispensary," to prepare
truly "^^all cliemical and galenical
medicines in order to serve all
families, shipping and poor in Great
Britain and Ireland at reasonable
rates, and the poor shall have the
constant advice of able physicians."

Company for the producing of a cheaper
supply of white-lead.

Company for making all sorts of paste-
board, packing paper, &c.

Company for the purchase of disputed
titles in Great Britain and especially
in Ireland ; and, by the provision of
sufficient funds to carry on the cases,
to obtain possession of the lands on
behalf of the company.

Company for the improving of an art,
lately found out, for the making of
soap, 6 lbs. of which is more service-
able than 8 lbs. of the best brown
soap.
Company for the further improvement

of the diamond trade.
Company to establish woollen factories
in those counties adjoining the sea-
coast to prevent the smuggling of
wool to France.
Company for victualling ships of the
Navy and merchant-men.
[The amount paid in was returned on
June 20th and 21st.]
Co-partnership in the " milled-lead ad-
venture," and the buying of lead-
mines [cf. supra, pp. 104-8].
Company for the better making of
crape.

Pennsylvania Coffee

House.
Half Moon Tavern.

Castle Tavern.

Swan and Hoop
Tavern.

Jerusalem Coffee

House.
Vine Tavern.

Sam's Coffee House.

Buffalo's Head.

Capital

Ship Tavern.
Ship Tavern.

Mulford's Coffee
House.

Ship Tavern.

Hanover Coffee
House.

Globe Tavern.

Ship Tavern.
Cole's Office.

2,000,000

4,000,000

;3,ooo,ooo

3,000,000

120,000
2,000,000

2,000,000
5,000,000

4,000,000

454 Promotions of the South Sea Period 1719-20 [div. xi

Date when the
subscription
was opened

No.

June 9

124

>} )>

125

jy a

126

)} i}

127

„ 8,9

128

„ 9

129

33 »

130

3) 3>

131

ii ii

132

ii a

133

ii >)

134

if a

135

>f )}

136

» 8,0

137

Description

Co-partnership for trading in hair,
"hair being a commodity whose
consumption is equal to, if not ex-
ceeds, most of the necessaries, used
in dress by both sexes."

Company for buying and selling South
Sea stock and all other public stocks.
[Promoted by Matthew West, Banker.
An account of West is given in
A Handbook of London Bankers, by
F. C. H. Price, London, 1890-1,
p. 174.]

Company for a particular method for
the improvement of lands in Great
Britain, ^^ whereby £20 to £30 per
annum is expected to be made on
every acre, so improved."

Company for carrying on the woollen
trade in the North of England.

Company for the improvement of the
soap trade, and the importing of oils
and other materials used in the
woollen trade.

Company for drying malt with hot air
[Busby's invention].

Company for building or rebuilding

houses, or any other edifices, on new

or old foundations in any part of

England, to insure houses, &c.

[The " permits," which soon became

notorious as the Globe Permits, were

1*. per cent, or 10*. for a share of

£1,000.]

Company for paving and the better
re-paving of the streets of London
and Westminster.

Company for "making looking-glass
after the Italian chrystal manner for
looking-glasses, coach-glasses and
sash windows, and also several other
things out of that fine chrystal
material."

Company for making glass and glass-
bottles.

Company for the making of sail-cloth
in Scotland.

Company for importing materials for
brushes and mops, also broomsticks
from Norway and Germany.
[The capital was to be " some millions
sterling. "]

Company for carrying on and improv-
ing "the British alum works."

The sharers in an engine, to supply
fresh water to the inhabitants of
Deal, and also to ships windbound.

Where the

subscription

was taken

Ship Tavern.

Seven Stars (Clare
St.).

Pope's Head
Tavern.

Swan and Rummer.

Rainbow Coffee
House.

Busby's Chambers,

Gray's Inn.
Globe Tavern.

Sam's Coffee House.

Cole's Coffee
House.

Salutation Tavern.
Ship Tavern.
Ship Tavern.

The Crown,
Black Swan.

4,(

3,000,01

2,000,0(
2,00O,0C

Div. XIII.] Promotions of the South Sea Period 1719-20 455

)ate when the
mbscription
was opened

No.

June

138

}}

139

140

141

142

143

144

}}

145

146

147

148

149

160

151

152

158

154

155

156

Description

Company for buying up and importing
Dutch and Flemish lace.

Company for the encouragement of the
breed of horses and for the importa-
tion of the most useful and acceptable
horses from all foreign parts.

Company for purchasing perpetual ad-
vowsons, rights of patronage and next
presentations^ and for improving of
glebe and church lands, and for re-
pairing and rebuilding parsonage
and vicarage houses.

Company for making iron and steel in
Great Britain.

Company for supplying Liverpool with
water.

Company for erecting houses and hos-
pitals for maintaining and educating
bastard children, by which all the
parishes of England will be eased of
a vast charge.

Company for making Manchester stuifs
or "dittees."

Company to supply London and West-
minster with the best sea-coal.

Company for draining and improving
about 40,000 acres of land in Flint-
shire.

Company for purchasing lands and
ground rents, in order to raise estates
by building thereon.

Company for erecting loan-offices for
the assistance and encouragement of
the industrious, by supplying them
with cash at moderate premiums.

Company for keeping all the streets
within the Bills of Mortality paved,
repaired, swept and cleansed.

Company for carrying on the corn trade
in all its branches in Great Britain.

Company to make iron with pit-coal
" owing to the extreme dearness of
timber and char-coal."

Company for making bays in Colchester
and all other parts of Great Britain.

Company for settling the island of
Santa Cruz.

Company for improving certain Crown
Lands.

Company for dealing in lace, hollands,
cambric and lawn, and to make the
same in England, as good and cheap
as if the same came from abroad.

Company for furnishing merchants and
others with watches at a much
cheaper rate than can possibly be
done by any other method.

Where the

subscription

was taken

London Stone
CoiFee House.

Sam's Coflfee House.
Fountain Tavern.
Ship Tavern.

Ship Tavern.
Garra way's.
George Tavern.

Hanover Coffee
House.

Blue-Coat Coffee
House.

Fleece Tavern.
Sam's Coffee House.

Virginia Coffee
House.

Garra way's Coffee
House.

Sun Tavern.

Capital

2,000,000

3,000,000
1,000,000

2,000,000

4,000,000

3,000,000
2,000,000

456 Promotions of the South Sea Period 1719-20 [div. xiii.

Date when the
subscription
was opened

No.

June 11 1 1.57

158
159

160

161

162

163

164

165

166

167

Description

A society to insure all masters and
mistresses whatever loss they may
sustain by theft from any servant
that is ticketed and registered in
this society ; as also to support such
servants, out of place, that fall sick
or lame.

Company for making iron with pit-coal.

ITie Frame-work Knitters' company or
stocking-makers' company, for the
trade of making silk and worsted
stockings, waistcoats, breeches,
gloves, caps and other goods worked
in frames.

^'^The Publick Treasury"; for lending
money on real security to wholesale
dealers, to pay customs on behalf of
merchants on goods imported, to
grant annuities.

[This was a reconstruction of a com-
pany formed in November 1716.
In 1720 the capital was divided into
50,000 shares, these were now offered
for sale, on behalf of the share-
holders at £100 each.]

Company for buying and selling land,
and lending money on land securities.

The Holy Island company, for erecting
salt pans and establishing a fishery
and for fencing in and bounding
60,000 acres of land there and in
three districts adjoining, also for
cutting and working the fine veined
marble found on this property.

Company for building a new square,
and purchasing as many houses as
possible in the most convenient
places, to sell or let the same at
advanced prices.

Company for erecting and maintaining
certain engines for raising sand and
stones out of rivers and harbours,
'^'^for the better cleansing and the
rendering the same more navigable."

Company for the improvement of tillage
and the breed of horses.

Company for encouraging the impor-
tation of masts, deals, planks and
timber, from Hanover, Bremen,
Hamburg and other parts of Ger-
many.

Company for buying wool for spinning
into goods in demand in Spain,
Holland, Switzerland and the Plan-
tations.

Where the

subscription

was taken

Devil Tavern,
Charing Cross.

Sam's Coffee House.
Hall near Cripple-
gate.

St Paul's Coffee
House.

Capitals

3,000,(

4,000,00(
2,000,00(

5,000,(

Swan Tavern.

John's Coffee
House.

Waghorn's Coffee
House.

Pope's Head
Tavern.

Cross Keys Tavern.

Waghorn's Coffee
House.

Hanover Coffee
House.

5,000,000

2,000,000

3,000,000

Div. XIII.] Promotioiis of the South Sea Period 1719-20 457

No.

168
169
170

171
172

173
174

175
176

177
178
179

180
181

182
183

184

Description

Company for furnishing London with
hay and straw.

Company for improving the paper-
manufacture and the art of printing.

Company for the transmutation of fluid
mercury or quicksilver into a solid
and malleable body.
[^^By a just calculation 'tis demon-
strable that each subscriber will get
800 per cent."]

The Hand and Sun Fire Office.

Company "for settling the country on
a desolate river more than 70 miles
up the main continent in Acadia."

The sharers in the sun-flower patent
for making oil from seeds.

Captain Welbe's company of London
adventurers for the carrying on a
trade to (and settling colonies in)
Terra Australis and improving the
gold and silver mines.

The English company for insuring
children's fortunes.

Co-partnership for making all sorts of

fine druggets^ serges, &c. in Ireland.

[Subscription of £900,000 on 22nd

and a further £300,000 on the

24th.]

Sharers in the malt and hop patent
under Keats' receipts.

Company for making starch out of
potatoes under C. Joynes' patent.

Company for the British improvement
of timber and uncultivated lands
[Sir John Lambert's Scheme].

Company for the oil patent with land
security.

Sharers in Long's patent for meliorating
oils.
[There was a John Long, a banker
in Lombard St., who failed in Sep-
tember 1720 — Price, Handbook of
London Bankers, p. 103.]
Company for extracting gold and silver
from lead and other sorts of ores
[Pontack's receipts].
Company of the Copper Miners of
England.
[New additional stock, vide supra, ii.
pp. 434-5.]
Hudson's Bay company.
[New additional stock, vide supra, ii.
pp. 236-7.]

Where the
subscription

The Great James.

Waghorn's Coffee

House.
Fountain Tavern.

Waghorn's Coffee
House.

Globe Tavern.

South Sea House.

Widow Joe's Coffee

House.
Sam's Coffee House,

Globe Coffee

House.

Virginia Coffee
House.

Garraway's Coffee
House.

The House on the
right-hand side of
Fox Ordinary
Court, Nicholas
Lane.

Long's Shop,
Lombard St.

Marine Coffee
House.

Hudson's Bay
House.

Capital

4,000,000
2,000,000

10,000

1,200,000

105,000

283,508

458 Promotions of the South Sea Period 1719-20 [div. xm.

Date when the
subscription
was opened

Aug.
Aug. 8-12

Sept. 10

No.

185
186

187

188

189
190

Description

British and Irish Office for general
insurance against fire in Ireland
\yide supra, p. 374].
Co-partnery of the freemen-burgesses
of the Royal Burrows of Scotland for
carrying on a fishing trade.
[Shares were £100 each. The govern-
ment was in the hands of managers,
of whom nine formed a quorum.
No member might subscribe for
more than £3,000 sterling or less
than £1,000 sterling — Articles of
the Co-Partnery of the Freemen... for
Carrying on a Fishing Trade, Edin-
burgh, 1720.]
Company of the mineral adventurers

at Neath.
[Carried on under the charter of the
Mine Adventurers, vide supra, ii.
p. 457.]
Company for the Golden Islands to the
south of Port Royal, Carolina, con-
taining 100,000 acres.
The Grantees of the Shannon wreck.

Company for the effectual carrying on
of the lead mines in Derbyshire.

Where the

subscription

was taken

Promoted at Edin-
burgh.

Waghorn's Coffee

House,
Mitre Tavern,

Fleet St.

Capit

100,000

DIVISION XIV.

STATISTICS OF THE CHIEF JOINT-STOCK COM-
PANIES OF ENGLAND, SCOTLAND AND
IRELAND TO 1720.

The following tables summarize certain statistical data relating to
the more important companies.

The first column gives the date at which the undertaking is first
known to have been in existence.

The second column gives the title of the undertaking when it was
established as a company. In cases where there was a charter the full
title is recorded, where there was no charter that used by the officials is
printed.

The third column gives the instrument under which the business was
carried on. The following contractions are used :

C = charter of incorporation.
AP = Act of Parliament (England).
AP (Scotland) = „ „ (Scotland).

P = patent to one or more persons but without

incorporation.
D = deed of co-partnership.

^The fourth column relates to the government of the company.

The next four columns are devoted to particulars relating to the
capitalization, where these are available.

The last column includes information of a more miscellaneous
character, such as the quorum, voting rights, &c.

462 Statistics of Companies

"DIV. XIV.

Date of

Instrument by which

first

Title

the company was estab-

Type of Govemm

mention

lished and the date

1653

The Mysterie and Companie of the Marchants

D1553

1 or 2 Governf

Adventurers for the discoverie of regions.

C 1555

4 Consuls. ■

dominions and places unknown ;
The Marchants Adventurers of England for

AP 1566

24 Assistants

Also subsequent

the discoverie of Lands, Territories, Isles,

Orders of the

Dominions and Seignories unknown and

Privy Council.

not before that late Adventure or Enter-

prise by sea or navigation commonly fre-

quented ;

The Fellowship of English Merchants for the

Discovery of New Trades ;

1 ^^^^1

The Muscovia Company ;

The Muscovy Company ;

The Russia Company.

1561

The Governors, Assistants and Commonalty

P1564

2 Governors.

of the Mines Royal ;

C 1568

4 Deputy-

The Governors, Assistants and Society of the

C 1604

governors.

City of London of and for the Mines Royal.

and numerous sub-
sequent grants.

6 Assistants.

DIV. XIV.]

Statistics of Companies

463

Capitalization

ock

Number of
sliares

240

ock

Value

of each

25
200

850

Capital

6,000
48,000

64,687

20,400

2 2 « r«

1553
1555
1564
?1572
? 1586
1604
1617
1654
1694

Number
of share-
holders

240
207

80
12
80

50
12 to 14

1569
1571

Remarks

22
English
share-
holders.

The origin of this company is to be
found in the exploration syndicate of
1553. In 1555 a charter of incorpora-
tion was obtained. The quorum at
a *^^governor's court" was 15, at which
the governor and 2 consuls should
be present. If the governor were
absent, the quorum was constituted
by 3 consuls and 12 assistants. In
1566 the title was changed by an act
of Parliament of that year.
Though the charter remained opera-
tive for a long time, a succession of
financially distinct ventures were
carried on under it. These may be
dated approximately —

The first and second companies from
1555 to 1586.

} Separate annual undertakings from
1586 to 1593.

The third company from 1593 to 1607.

The fourth company from 1608 to 1617.

The fifth company from 1617 to 1620.

One or more companies from 1620 to
1638.

Another company after 1638.
About 1669 the last joint-stock was
wound up and the trade to Russia was
continued by a Regulated company.
Whale-Fishing at Greenland. Subordi-
nate and independent undertakings
were formed for this business. The
first (1617) was the joint-adventure of
the Russia and East India companies.
About 1620 a whaling company was
formed by freemen of the Russia com-
pany, which was described as the
Greenland company. By 1654 this
and two other undertakings had failed.
In that year fresh capital was raised
which was lost by 1657. Tlie whale-
fishing at Greenland was freed from
the company's monopoly in 1672.

This undertaking was established by an
indenture between Elizabeth and two
persons in 1561. In 1564 the benefit
of the agreement was assigned to
Daniel Hochstetter, to whom and his
partners a charter was granted in
1568. By a further charter in 1604
the title was changed. At this period
some of the shares were divided into
halves and quarters.

This organization formed subsidiary
companies, one of the most important
of which was the Mines Royal of Wales
which was in existence in 1623.

464

Statistics of Companies

[DIV. XIV.

Date of

first
mention

1565

1671

1576

1599

Company formed for mining in Scotland by
Cornelius de Vois.

The Governor, Assistants and Society of the

Mineral and Battery Works ;
The Governor, Assistants and Society of the

City of London of and for the Mineral and

Battery Works.

The Society for the New Art of making
Copper.

The Adventurers to the North- West for the

Discovery of a North- West Passage ; or
The Companye of Kathai.

Proposed Planting Company promoted by
Alexander Carlile.

The Governour and Companie of Merchantes
of the Levant.

The Governor and Company of Merchants of
London trading into the East Indies.

Instrument by which
the company was estab-
lished and the date

P1565
C 1568
C1604

C 1574

D1576
C1577

C1581
C1592

C1600
and many subse-
quent charters.

Type of Grover

2 Governors.
2 Deputy-

governoi
8 Assistants.

1 Governor.
1 Deputy-go^

First year-

1 Governoi

2 Consuls.
12 Assistant

Afterwards-
2 Governoi
4 Consuls.
12 Assistant

A Committ

1 Governor.
12 Assistant

1 Governor.
1 Deputy-
governor.
24 Committees.

DIV. XIV,

Statistics of Companies 465

Capitalization

III...

Date at w

capital or r

ber of shj

holders

recorde

Number

Number of
shares

Value
of each
share

Capital

of share-
holders

Remarks

100

Scots

5,000
Scots

1567

For the
finance of
this com-
pany tw<i«H.
pp. 417-8.

Quorum, 12 shareholders including a
governor or deputy-governor, 4 as-
sistants and six of the commonalty.

200

1,000

1571

The membership was not to exceed 20

875

1576

Quorum, 15 stockholders.

5,150

1577

6,952

1578

11,600

The shares were whole, half, or quarter

12i

shares.

4,000

1581

In 1599 or 1600 the constitution was

130

1592

changed from the joint-stock to the
regulated type.

; Voyage i

—

68,373

1601

198

Voting Rights 1650, one vote for each

}} "

—

60,450

1604

£500 stock. This was confirmed by

„ III

—

53,500

1607

the charter of 1661.

}> IV

—

33,000

1608

Voting Rights 1694 to 1698, one vote for

„ V

—

13,700

1609

£1,000 stock up to a maximum of 10

J, VI

—

80,163

1610

votes.

„ VII

—

15,634

1611

Voting Rights 1698, 1 vote for £500 stock.

,, VIII

—

55,947

1611

2 votes,, £1,000 „

i> IX

—

19,614

1612

3 „ „ £2,000 „

„ X

—

46,092

1612

4 „ „ £3,000 „

,, XI

—

10,669

1612

5 „ „ £4,000,,

}} XII

—

7,142

1613

and no more.

First Joint-

—

418,691

1613 to

Qualification 1693, for governor and

Stock.

1617

deputy-governor £4,000 stock ; for

Second

—

1,629,040

1617 to

951

committees £1,000 stock.

Joint-

1628

The New General Stk.was £739,782. 10*.

Stock.

nominal, of which only 50 °/„ was paid

Persian

till 1681 when stockholders were

Voyage i

—

125,000

1628

credited with the remaining 50°/„, as

—

150,000

1629

a bonus.

III

—

100,000

1630

This company was amalgamated with the
English East India company in 1708-9,

Third

—

420,700

1632

Joint-

and the two together formed the

Stock.

'^^ United" company.

C. III.

466

Statistics qf Companies

[DIV. XIV.

Date of

first
mention

Instrument by which
the company was estab-
lished and the date

Type of Gove

1606

ihe Treasurer and Company of Adventurers
and Planters of the City of London for the
First Colony in Virginia.

C1606
C1609
C1612

1616-7

1621
1621

1612

The Society of Particular Adventurers for
Traffique with them of Virginia in a Joint-
Stock.

A Joint-Stock for a glass-furnace in Virginia
for making Glass and Beads.

A Joint-Stock for Transporting 100 Maids to
Virginia to be made Wives.

The Governor and Company of the City of
London for the Plantation of the Somers
Islands.

D
D

C1615

1 Treasurer.
1 Deputy-treas
and a Counc

1 Director.
5 Committees.

1 Governor.

24 Assistants (
of these being
puty-governo:

DIV. XIV.]

Statistics of Companies

467

Capitalization

Number of
shares

First
General
Voyage.
Fourth
Joint-
Stock.
Second
General
Voyage.
United
Joint-
Stock.
New Gen-
eral Stock.

Value

of each

Capital

80,450
105,000
192,800

739,782^

744,000
1,574,608

/12A 36,624
I 6l 30,862

100

400

7,000

" near
£1,000"

800

10,000*

1641

1642

1648

1650

1657

1681

1688
1693
1698
1701
1702
1703
1707
1708

1619
1620

Number
of share-
holders

Ilemarks

530 to
600
320
482
1,200
- 763
759
960
916
965

858
866

1621
1621

1612
1613

117

Quorum, 5 members of the council (of
whom the treasurer or deputy-trea-
surer must be one) and 15 of the
generality.

Voting Rights, 1 vote for each member
free of the company, whether he was
a shareholder or not, who was person-
ally present at a court and no more.
From April 28, 1619, votes were re-
corded by ballot.

These were subsidiary enterprizes of
the Virginia company. Of a like
character were a fishing company
1618 (capital £1,800), another fishing
company 1620 (capital £1,000), ^^the
New Magazine" 1620 (capital £1,000),
a Magazine for Apparel 1621 (capital
£1,800), a fur-trading company 1621
(capital £900), a boat-building com-
pany 1621 (capital £1,000).

Voting Rights as in the Virginia company,
save that there was no ballot.

Subsidiary Companies, for whaling 1616
and 1662, for the planting of sugar-
canes 1620, for transporting maids
1621, and the Magazines which began
in 1617.

* Estimated total expenditure, vide
supra, II. p. 253.

30—2

468

Statistics of Companies

1610

1608

1618

1619

1620

1621

rhe Society of the Governor and Assistants
of the New Plantation in Ulster within the
Realm of Ireland.

lie Governor and Company of the New
River brought from Chadwell and Amwell
to London.

Instrument by which
tlie company was estab-
lished and the date

The Governor and Company of Adventurers
of London trading to Gynney and Bynney.

rhe Governor and Company of Noblemen
and Gentlemen for the Planting of Guiana.

j The Council established at Plymouth in the
County of Devon for the Planting, Ruling,
Ordering and Governing of New England
in America.

ITie Adventurers for Planting at New Ply-
mouth.

i The Undertakers for the Plantation of New
Scotland.

C1613

APs (to the City)
1606 and 1607
transferred to
Middleton 1609

D James I., 1612

C1619

D Charles I., 1631
and subsequent
APs

C 1618

C 1627

C1620

1 Govern(
1 Deputy-
governoi

24 Assistants.

1 Governo^
1 Sub-goveri
1 Treasurer.

D 1620 and grants ^

1 Governor.
1 Deputy-
governor.
12 Directors.

1 Governor.

40 Members o

Council.

1 President,
from the New Eng- j 1 Treasurer,
land company.

P1621

mv. XIV.

]

Statistics

of Companies 469

Capitalization

which
rnum-
ihare-

psis
ded

Number

Number of
shares

Value
of each
share

Capital

Date at

capital 0

ber of 8

holdei

recor

of share-
holders

Remarks

33331

40,000

1613
Before

The funds of this Society were contri-
buted by 54 London Livery companies,
the position of which resembled that
of a shareholder in a joint-stock com-
pany.

1619

The City Corporation liad obtained

1631

compulsory powers in 1606 which were

Adventurers'

257i

9,262

transferred to Middleton in 1609. In

1612 a moiety of the business was

ig's Moiety

9,262

■1615

acquired by James I., in consideration
of his paying Middleton one-half of
the capital expended to that date and

Total

18,524

bearing one-half of the remaining

cost. In 1619 the proprietors of the

original moiety (then divided into 36

shares, known as Adventurers' Shares)

were incorporated (the quorum at a

general court being 5). In 1631

Charles I. transferred his moiety to

Middleton, in consideration of an

annuity of £500. This moiety was

also divided into 36 shares.

In 1904 the water undertaking was sold

to the London Water Board, but the

company continues to exist to ad-

minister its estate, consisting of house-

property.

5,766^^

1620

* Total expenditure to 1620.

150

1627

100

5,000

110

1622

Shareholders must be ^^ persons of
honour or gentlemen of blood." An
exception was made in the case of six
merchants from the West of England.
There was a subsidiary company for
fishing, the shares in which were £50
each. .

7,ooot

1624

70:i:

t Total expenditure.
1 This was the number of non-personal
adventurers.

100

8,000

1624 to
1628

The persons, who became undertakers
in 1624, received the title of Baronet
of Nova Scotia.

470

Statistics of Companies

[div. XIV£

Date of

first
mention

1628

1629

Title

1629

1631

1631
1631

1630

1642
1656

1661

1670

The Governor and Company of the Massa-
chusetts Bay in New England.

The Governor and Company of Adventurers
for the Province of Laconia in New Eng-
land.

The Company of Adventurers to Canada.

'ITie Governor and Company of Adventurers
for the Plantation of the Islands of Provi-
dence^ Henrietta and the adjacent Islands
between 10° and 20° North Latitude and
290° and 310° of Longitude.

The Company of Merchants trading to Guinea.

The Undertakers for the Lindsey Level.

The Governor, Bailiffs and Comminalty of the
Conservators of the Fens in the Counties
of Cambridge, Huntingdon, Northampton
and Suffolk and the Isle of Ely.

The Society of the Fishery of Great Britain
and Ireland.

riie Adventurers for Lands in Ireland.

rhe Adventurers to the East Indies in the
Ship William.

rhe Governor and Company of the Royal
Fishery of Great Britain and Ireland.

The Royal Company for the Fishery in Scot-
land.

The Company of the Royal Fishery of Eng-
land.

Instrument by which
the company was estab-
lished and the date

C 1629

Grant from New
England company.

P 1626-7
P 1633

C 1630

P1631

Type of Go\

1 Governoi
1 Deputy-
governor
18 Assistants.

1 Governon*
1 Deputy-gove
1 Treasurer.

C 1631

1 Governor.

1 Deputy-govei

2 Bailiffs.

C 1632

1 Protector.
12 Members of
Council.

AP 1642

A Committee of

C 1664

1 Governor.
1 Sub-governc
1 Deputy-
governor.
36 Assistants.

C1670
AP Scotland

C1677

1 Governor.
1 Deputy-govei
and Committ

DIV. XIV.

Statistics

of Companies 471

Capitalization

Date at which
capitalornum-
ber of share-
holders is
recorded

Number
of share-
holders

Number of
shares

Value
of each
share

Capital

Remarks

£
50

1628
1629

110

Quwrum, 7 Adventurers, of whom the
governor or deputy-governor must be
one.

10
24
24

200

500

1,000

2,000
12,000
24,000

1629
1630
1633

10
42

•

Of the 24 shares, six were subdivided
into halves and quarters.

There was a subsidiary company, known
as the Adventurers for Tortuga or the
Adventurers for Association from 1630
to 1635. In 1631 £70 per share had
been called up from eleven share-
holders.

The capital expended by this company
is said to have been £70,000.

2,500

45,000

4,650

93,000

1638

—

22,682^

360,000
46,200

1635

There were at least three subordinate
companies — William Noy's Associa-
tion, Lord Portland or Lord Arundel's
Association and Lord Pembroke's
Association.

—

10,980

1663-4

—

25,000

It is improbable that more than a small
amount of the nominal capital was
paid up.

—

100,000

1694

Only 10% had been called up in 1694.
An attempt was made to issue capital
to the extent of £1,000,000 in 1720.

472

Statistics of Companies

[div. XIV.

Date of

first
mention

1668

1670

1675

1667

1681

The Governor and Company of the Royal
Adventurers of England trading into Africa.

The Royal African Company of England.

'ITie Governor and Company of Adventurers
of England trading into Hudson's Bay.

i'he Undertaking for the Working of Mines
Royal in the Counties of Cardigan and
Merioneth.

'he Governor and Company of Undertakers
for raising the Thames water in York
Buildings.

The Company interested in the Manufacture
and Invention of Milled-Lead.

The Partners for insuring Houses against
Fire.

1680 The Company formed by Cuthbert Dykes to
supply Newcastle-on-Tyne with Water.

The Governor and Company of the Water-
work and Water-houses in Shadwell.

The Woollen Manufactory at New Mills in
the Shire of Haddington.

Instrument by which
the company was estab-
lished ana the date

C1662

C1672

C 1670
AP 1690

D1670

P 1675
AP 1691

AP 1670

D 1680-1
P1688

P1681
AP 1691

Type of Gover

1 Governor.
36 Assistants]

1 Governor.]
1 Sub-govei
1 Deputy-
governoi
24 Assistant

1 Governor.
1 Deputy-go^
7 Committc

A "Grand Cot
mittee " of
members.

1 Governor.
6 Assistants.

{

1 Governor.
24 Assistants.

AP (Scotland) 1681 5 Managers wh
elected a Praese

DIV. XIV.]

Statistics of Companies

473

Capitalization

Date at which
capital or num-
ber of share-
holders is
recorded

Number
of share-
holders

Number of
shares

Value

of each

Capital

Remarks

305

400

122,000

1662

Qualification of governor and assistants
one share of £400. There were also
half-shares.

111,100

444,400

625,250

1,101,050

451,850

1672
1680
1691
1693
1697
1712

198

A reconstruction of the foregoing com-
pany.

Quorum, at '' a governor's court," 7, of
whom the governor, sub-governor or
deputy-governor must be one.

Qualification (1714)of an assistant £2,000
stock.

Voting Rights, one vote for £500 stock
up to a maximum of 5 votes.

105

100

10,500

3] ,500
103,950

1670
1672
1690
1720

Quorum, at a governor's court, the

governor and 3 committees.
Voting Rights, 1670-89, 1 vote for £100

share; after 1690, 1 vote for £300

share.
Qualification, 1720, governor £1,800,

committee £900.

12
48

100
100

4,200

4,800
1,259,575

After
1675
1690
1720

A subsidiary company of the Society of

the Mines Royal.
Quorum, " at a full meeting," 5, of whom

3 must be members of the Grand

Committee.

Originally carried on by two partners.
In 1690 a company was formed which
was purchased in 1719 and the de-
velopment of landed property was
begun. Of the stock of 1720 only
10 °/„ was called up in that year.

At first constituted as a small company
in 1670. About 1 689 the shareholders
sold the undertaking to Thomas and
Charles Hale. In 1720 efforts were
made to float it as a company.

3,500

1680

Founded by Nicholas Barbon in 1667
and transferred to a company in
1680.

This undertaking was leased to
William Yarnold after 1697, but was
subsequently surrendered to the com-
pany.

k —

—

5,000

1681

Three of the five managers retired
annually by rotation.

474

Statistics of Companies

[div. xiyl

Date of

first
mention

Title

Instrument by which
the company was estab-
lished and the date

Type of (Jove

1682

Tlie Proprietors of the Convex Lights.

P1684
AP 1694

1683

The Patentees for making Salt- Water Fresh
and Wholesome.

P1683

1683

Captain Poyntz and Company for Planting
the Island of Tobago.

Grant from Duke
of Courland.

1685

The Governor and Company of the M^hite
Paper Makers of England.

P1686
AP 1690

1 Governofl

24 Assistaml

whom one

chosen \X

governor)

1687

The Royal Lustring Company of England.

P1688

C1692

AP 1693

1 Governo

1 Deputy-

govern<

12 Assistant

1689

The Droitwich Salt-works.

AP 1689

1689

Mr John Loftingh and Company, Proprietors

of the " Sucking- worm Engine."

■

P1689

1690

The Governor and Assistants of the King's
and Queen's Coi-poration for the Linen
Mainifacture in England.

C1690

1 GovernoM
1 Deputy- ■
governor.
15 Assistants.

1690

The Governor and Assistants of the King's
and Queen's Corporation for the Linen
Manufacture in Ireland.

C1691

1 Governor.
1 Deputy-
governor.
30 Assistants.

Silver and Lead-mining Company formed by
Sir Carberry Price.

D1690

1690

The Governor and Company of Glass-Makers
of London.

P 1691

1691

The Governor and Company of the Royal
Corporation of London for carrying on the
Linen and Paper Manufacture within the
Islands of Jersey and Guernsey.

C1691

1 Governor.
1 Deputy-
governor.
18 Assistants.

1691

The Governor and Company of the Copper
Miners in England.

C1691

1 Governor.
1 Deputy-
governor.
10 Assistants.

1691

The Governor and Company for making
Saltpetre in England.

P1691
C 1692

1 Governor.
1 Deputy-
governor.
24 Assistants.

DIV. XIV.]

Statistics of Companies

475

Capitalization

Date at which
capital or num-
ber of share-
holders is
recorded

Number
of share-
holders

Number of
shares

Value
of each
share

Capital

Remarks

32
32

160
800

£
5,120
25,600

Before
1694
1695

In 1692 the members were described as
being all "persons of quality."

5,000

60,000

1683

400

20,000

1686

The governor and deputy-governor must

be present at all meetings at which

orders were made.
Voting Rights, one vote for each share.

An additional stock was offered for

subscription in 1690.

2,400

60,000

1692

134

Voting Rights, 1 vote for each share and

no more.
Qualification of an assistant, 10 shares.
These shares were issued at £5 premium.

An invention for draining lands.

340

3,400

1690

Voting Rights, 1 vote for each share.
In 1691 an issue of new shares was
made at £50 per share.

400

2,000

1690-1

An additional stock was issued in 1691.

4,800

81,600
25,000

1693

120

Purchased in 1698 by the Mine Adven-
turers' company at £20 per share.

Quorum, 7 shareholders.

Qualification of an assistant, one share.

700
21,000

105,000

1692
1720

Quorum, at a meeting of the court, 7.

1,200

1692

Quorum, at a meeting of assistants, 7.
Voting Rights, one vote for each share.

476 Statistics of Companies

BIV. XIV.

Date of

first
mention

Title

Instrument by which
the company was estab-
lished and the date

Type of Goven

1689

The Governor and Company for making
Hollow Sword-Blades in the North of
England.

C 1691

1 Governor
1 Deputy-
governo
12 Assistants

1691

The Scots Linen Manufacture.

AP (Scotland) 1694

30 Assistants
whom a gove
deputy - gover i
and treasured
to be chosefl

1546

The Hampstead Aqueducts.

D1692

A CommittjB
Managemeifl
sisting of fror
to 15 membiMi

1692

The Governor and Company for Smelting
down Lead with Pit and Sea Coal.

C 1692

1 Governor^l

1 Deputy- S

governofl

12 Assistant!^!

1692

The Company of Merchants trading into
Greenland.

AP 1692

1 Governor^

1 Deputy- 9

governor^

16 Committees.

The Governor and Company for Digging and
Working Mines by a Joint-Stock in Eng-
land.

C1693

1 Governor.
1 Deputy-
governor.
20 Assistants.

ITie Governor and Company for making Iron
with Pit-Coal.

C1693

1 Governor.
1 Deputy-
governor.
14 Assistants.

The City Conduits.

The London Bridge Water- Works Company.

DP1694
D1703

1 Governor.
9 Assistants.

1694

The Governor and Company of the Bank of
England.

C1694
AP 1694

1 Governor, l
1 Deputy-
governor.
24 Directors.

DIV.

XIV.]

Statistics of Companies

477

Capitalization

Number of I J*^" h

6,000

600

300

500

Capital

©-i^ t, O 01

£
150,000
268,867

30,000

12,000

Number
of share-
holders

1703
1708

1692

40,000 1892

10,500

105,000

1,200,000,
for changes
in capital
after 1694,
vide supra,
p. 243.

1703

1694

1,267

Remarks

Quorum, at a meeting of assistants, 5.

£30,000 was the proposed capital, oflFered
for subscription.

The Corporation had obtained powers
in 1546 for bringing water from
Hampstead. These powers were
transferred to a company in 1692.

Qualification of a committee, 10 shares.

Voting Bights, 1 vote for each share.

Voting Rights, under £500 stock, no
vote; £500 stock, 1 vote; £1,000
stock, 2 votes and no more.

Voting Rights, 1 vote for each share.

Voting Rights, 1 vote for each share up

to a maximum of 4 votes.
Quorum, governor's court, the governor,

deputy-governor and 5 assistants.

The City Conduits company was formed
to lease the Conduits from the Cor-
poration . I n 1 703 it was amalgamated
with the London Bridge water-works
(founded in 1582).

No applicant might subscribe for more
than £10,000 stock nor might any
stockholder own more than £20,000
stock.

Quorum of directors 13, in which the
governor or deputy-governor must be
included.

Qualification, governor £4,000 stock,
deputy-governor £3,000 stock, di-
rector £2,000 stock.

Voting Rights, 1 vote for £500 stock and

478

Statistics of Companies

[DIV. XIV.

Date of

first
mention

1694

1695

1696

1695

1698
1702
1709

The Scots White-Paper Manufactory.

The Bank on Tickets of the Million Adven-
ture.

The Office of Land-Credit.

The Land Bank established anno domini 1695.

The National Land Bank.

The Governor and Company of the National
Land Bank of England.

The Governor and Company of the Bank of
Scotland.

The Company of Scotland trading to Africa
and the Indies.

The Contractors with the Czar of Muscovy
for the Importation of Tobacco into his
Dominions.

The English Company trading to the East
Indies.

The Committee of Joint-Management of the
East India Trade.

Instrument by which
the company was estab-
lished and the date

AP (Scotland) 1695

D1695

D1695
D1695

D 1695

D1695
AP 1696

AP (Scotland) 1695

D about 1696

AP 1698
C1698

Indenture Tripartite
1702

The United Company of Merchants of England AP 1698

trading to the East Indies. C 1698

Indenture Tripartite
1702

Type of Gover

13 Managei
whom a
was elect

24 Manage
Committee

'^A Cham!
Control.'

21 Trustees
Managers.]

1 Governor]
1 Deputy-
governc
24 Director

50 Directors.

24 Directors.
24 Committees.
24 Directors.

DIV. XIV.]

Statistics of Companies

479

Capitalization

Number of
shares

1,400

Value
of each
share

Capital

£
5,000

320,000
500,000

100,000

400,000

Additional Stock

12,000

1,662,000
581,700

3,163,000

31,080

3,194,080

+3 O «I CB ^H

1700

1695

1696

1698

1708

1709 to

1717

Number
of share-
holders

1,317

Remarks

Voting Rights, 1 vote for £300 stock and

no more.
Qualification of a committee, £500 stock.

Chamberlain's land bank.

Each subscriber of land had one vote.

Voting Rights, £300, 2 votes; £500,
3 votes ; £1,000, 5 votes and no
more.

Qualification of a manager, £1,000 stock.

An amalgamation of the two foregoing
companies.

Qualifications, governor £8,000 Scots,
deputy-governor £Q, 000 Scots, director
£3,000 Scots.

Quorum at court of directors, 7.

There was called up 10 °/g of the nominal
capital.

There was called up 42^°/„ of the
nominal capital. The number of
members is that of distinct subscrip-
tions, some of these were on joint-
account, others were made by the
Royal Burghs.

Quorum at a court of directors, 13.

Qualification of a director £2,000 stock.

Voting Rights, one vote for £500 stock
and no more.

The original capital consisted of
£1,662,000, lent to the government,
out of a total of £2,000,000, which
carried the monopoly of the trade to
India. To provide working capital
an additional stock was raised by calls
of 35 °/„ . The Old or London Com-
pany subscribed £315,000 towards the
two million loan ; and, by the Inden-
ture Tripartite of 1702, the holdings
of both companies in that loan were
made equal and the additional stock
of the English company was paid off.
From 1702 to 1709 the trade was
carried on by a committee of manage-
ment, on behalf of the two companies,

whi<^h wftrp. fina.llv a.ma,ljcra.mfl.ti»d in

480

Statistics of Companies

[dIV. XIV.

Date of

first
mention

1698

1699

1706

1711

1713

1717

1719

The Governor and Company of the Mine-
Adventurers of England.

The Charitable Corporation for the Relief of
Industrious Poor by assisting them with
small sums upon Pledges at Legal Interest.

The Company of London Insurers.
The Sun Fire Office.

The Company of London Insurers upon Lives.

The Governor and Company of the Merchants
of Great Britain trading to the South Seas
and to other parts of America and for
encouraging the Fishing.

The Governor and Company for making and
vending Beech-Oil.

The Undertaking kept at the Royal Exchange
for insuring Ships and Merchandize at Sea ;

The Mercers' Hall Marine Company ;

The Societies of the Mines Royal and of the
Mineral and Battery Works^ who have
undertaken to insure Ships at Sea ;

The Old Insurance ;

Onslow's Insurance ;

The Royal Exchange Assurance.

Ram's Insurance or
Colebrook's Insurance or
Chetwynd's Insurance or
The London Assurance.

Instrument by which
the company was estab-
lished and the date

D1698
C1704

C 1704

D 1710

C 1709

C 1711
AP 1711

P 1713
D 1714

AP 1720
C 1720
C1721

AP 1720
C1720
C1721

Type of GrOvei

1 Governoi
1 Deputy-
govern<
12 Assistant

A Committc

A Commitl

12 Directors,
chose one of tl
number as Chi
man.

1 Governor.
1 Sub-governo]
1 Deputy-
governor.
30 Directors.

9 Directors (171
24 ,, (171

1 Governor.
1 Sub-go veruoi
1 Deputy-
governor.
24 Directors.

1 Governor.
1 Sub-governoi
1 Deputy-
governor.
24 Directors.

DIV. XIV. J

Statistics of Companies

481

Capitalization

Number of
shares

bonds

25,000

4,008

6,012

24
2,400

Value
of each

20
45

?40
?10

5,000
11,520

19,740
call

Capital

125,000

80,160
270,540

20,000

30,000

600,000

?960
? 24,000
111 refer-
ence to the
finances of
the com-
pany vide
supra, pp.
282-8

9,177,967
10,000,000
11,746,844
37,802,203

20,000

225,000

Nominal

1,152,000

Paid

115,200

For the

subsequent

changes of

capital vide

^Mjt>ra,p.410

98,198|*
97,850

1698

1705
1710

1704

1719

1709-10
1720

Number
of share-
holders

700
600

1711
1715
1719
1720

1714
1715

1719

1720

400

Remarks

Quorum of directors, 5.

(Salification of a director, 20 shares.

Voting Rights, one vote for each 3 shares.

The company was floated by a compli-
cated lottery {vide ii. pp. 445-7).
Each member of Sir C. Price's com-
pany obtained £20 in cash or its
equivalent in securities of this com-
pany for every share in the old one.

Established by Charles Povey about
1706. Transferred to a company in
1709-10.

Voting Rights, one vote for each share.
Quorum at meetings of the committee, 7.
„ ordinary meetings, 20.

Qualification of governor £5,000 stock,
of a director £2,000 stock.

Voting Rights, 1 vote for £500 stock,
2 for £1,000 stock, 3 for £3,000,
4 for £5,000, and no more (Charter
1720).

Qualifications, governor £2,000, sub-
governor and deputy-governor £1,500
each, a director £1,000.

Voting Rights and qualifications the
same as those of the Royal Exchange
Assurance.

* On 170 shares only part of the calls
were paid and these shares were
forfeited. The figures given relate
to the Marine Undertaking only for
1720.

DIVISION XV.

STATEMENTS RELATING TO THE CROWN AND
NATIONAL FINANCES.

31-2

STATEMENTS EELATING TO THE CROWN AND
NATIONAL FINANCES.

The condition of the Crown and the national finances re-acted in
so many ways upon industrial progress that some account of these is
necessary in further explanation of the references to this subject in
Part I. Fortunately it will not be necessary, in a work such as this, to
attempt more than to present some definite indication of the financial
situation at different periods, which may be most clearly accomplished by
a series of abstracts of estimates of revenue and expenditure, with notes
of the amount of the debt. These statements are to be regarded as
supplements of, not substitutes for, those already in print, and therefore,
in point of time, they will be found to be unequally distributed.

The whole period, dealt with in this investigation, may be sub-
divided, with respect to existing information on the finances, into four
divisions. For the first, which extends to 1600, little that is reliable has
been printed and this epoch will be found somewhat copiously illustrated
in the financial statements which follow. The second period extends
from 1601 to 1668^ Here the labours of Gardiner and Dr W. A. Shaw^
have provided very full material. A few additional documents have
been used, but most of these are in such a form that they are capable of
condensation as footnotes in the first volume. There is one exception,
namely Statement J, which shows the position of the administration of
Charles I. on the eve of the Civil War.

A third period begins in 1668 and continues till the Revolution. Tc
supplement the defective state of our knowledge of the finances in these
years Statements K to R have been compiled. The first of these (K)
gives both estimated and actual revenue and expenditure from 1668 to
1678. Beginning with 1679, there follows a series of annual accounts
both of the Receipts and Issues of the Exchequer till the Revolution.
These are based on MSS. at the Bodleian Library, which have been
tabulated so as to show, as far as possible, the cash position from year
to year.

1 The (late to which The Calendars of Treasury Books ^ that have been published at
the date this account has been written^ extend.

2 Gardiner, History. (The financial tables in the larger edition of the earlier
parts are much fuller and more detailed.) The Introductions to The Calendars of
Treasury Books, by Dr W. A . Shaw.

486 Crown and National Finance [div. x^

After the Revolution, owing to the greater control of Parliameri
over the finances, the Journals of the House of Commons afford mud
valuable information^; while a detailed series of the accounts of t]
Revenue and Expenditure, beginning with the Revolution, is bein.
published in the Calendars of the Manuscripts of the House of Lords. So
much depends on the state of the debt, that it appeared advisable
continue the series of annual statements of receipts and issues till 169
at which date the funding of the debt began ^ Unfortunately there a
some quarterly accounts missing and others imperfect in the Bodleian
MSS., and therefore it has been necessary to complete the annual state-
ments by data from MSS. at the British Museum. There is a difference
in the methods of accounting in the two series to which attention may
be drawn, as it has an important bearing in the making of comparisons.
The " Books *" at the Bodleian record, under the head of " receipts,'" the
sums received from borrowings, and conversely, under " issues,'' the
repayments of principal together with the interest. The British Museum
MSS. give only the excess of debt contracted over debt paid off or vice
versa. It may be added that the various statements after 1668 have
been designedly compiled from documents other than those at the Record
Office, since it is to be hoped that eventually, by the continuation of the
Calendars of the Treasure/ Books, sl series of abstracts from the material
at that office will be printed.

Subject to these remarks, the financial statements of the greater part
of the seventeenth century should be intelligible. It is otherwise with
those of the Tudor period, which relate to transactions, conducted by
somewhat different methods of accountancy. In fact, just at this time,
several systems of recording the revenue and expenditure were in vogue,
which must be distinguished. It is for this reason that the Elizabethan
statements have been printed with some detail, in order to bring out
clearly these points of difference. To show the need of definition the
following are all correct specifications of "the revenue" for the year
Mich. 1588 to Mich. 1589:

Whole revenue or gross revenue.
(1) exclusive of loans.

Whole revenue nett, i.e. (1) less certain special
expenses.

^ The various grants have been printed in a convenient form in A Collection of the
Supplies, by Sir (.'harles Whitworth, London, 1765. The total receipts and expendi-
ture of William 111. are printed in The History of the Public Reventie of the British
E7npire, by Sir John Sinclair, Appendix iv. (Edition 1804, in. pp. 152-9), also in
Somers' Tracts (1751), xii. p. 73*.

2 History of the Earlier Years of the Funded Debt from 1694 to 1786 [C. 9010],
London, 1898.

£ «.

(1)

420,577 18

(2)

392,470 18

(3)

384,177 14

Div. XV.] Elizabethan " Revenue " ambiguous 487

«.

(4)

344,742

6 11

(5)

294,819

Revenue recorded at Exchequer.

Gross Ordinary Revenue {i.e. (1) less Extraordinary

Revenue).
(6) 258,419 7 10| Nett Ordinary Revenue (i.e. (3) less Extraordinary

Revenue).

The existence of such variety in the returns shows the necessity of
the inclusion of details and also the ambiguity in any expression, which
records the " revenue of Elizabeth " in a certain year as consisting of a
definite sum, without giving the separate items, or else some clue to
determine what kind of revenue is intended.

Differences in accounting such as these represent the various ways in
which the income of the Crown was regarded at the time, and what is
required is that the student of finance should make himself familiar with
the Elizabethan point of view. In some respects this, though it answered
the needs of the time, seems to anyone familiar with modem finance, a
curious one, since it consisted in regarding what was known as "the
Ordinary Revenue'' as an annual one; whereas "the Extraordinary
Revenue" was often collected and disbursed over a period of several
years. For this reason anything like an annual balance sheet of the
Crown finances was an exception, and was generally compiled for some
special purpose, often many years after .the year of account had closed \
Similarly, the recorded receipts and issues of the Exchequer represent
a check on the dealings of the tellers and collectors, in relation to those
branches of the revenue entrusted to their care^.

In many respects what is most fundamental, in the administration of
the Crown finances during the Tudor period, was the analogy to the
manor. In fact the revenue of the Crown was treated almost exactly
like that of a large estate, and in this connection the term — " the manor
of England " — was sometimes used to describe the property and income
of the sovereign. This analogy is especially close in the case of the
Crown lands and need not be insisted on, but it was carried further in
the feudal revenue and in that arising from the Customs, as well as from
the exercise of various functions of government. Just as the lord of a
manor, instead of collecting certain dues himself, might let these at
a fixed rent, so many branches of the Crown revenue were "farmed
out."" This was the practice with the more important portions of the
Customs. It follows, then, that the receipts from feudal and land
revenue, as well as from Customs and impositions and from the functions
of government, were reducible to a rental, and that in any year the
income from these sources for that following could be estimated with

1 E.g. the account for 1588-9, Statement D (i), infra, p. 516, was drawn up in 1610.

2 IHd., E, F, G, H, pp. 518-25.

488 Crown and National Finance [div. xv^

considerable precision. Indeed it would appear that, if due regard wei
paid to any new arrangenient, made with regard to renewal of farms
determining, the receipts to be expected from these sources could
always forecasted for the coming year with exactitude. This was s(
subject to several provisos. The most important of these was that the
farmers of the Customs were generally protected by a clause in theii
lease, under which, should the actual receipts fall below the rent payable,]
they were entitled to a rebate ; and, in a year where this deduction wasj
made, the actual Crown revenue would be proportionately reduced. li
there be added to these sources of income the First Fruits and Tenths oi
the Clergy with some other miscellaneous incomings, the conception oi
what is known as the Ordinary Revenue is reached, which was expected]
to suffice for the normal outlay of the government and the court'. Inj
dealing with that outlay, the same system was adopted. A certain sumj
was agreed upon for each of the main spending departments, which was]
payable monthly to those receiving most, and quarterly or half yearly tot
those obtaining less. The sum of these grants constituted the Ordinary
Expenditure and therefore the determination of the financial position, asl
far as Ordinary Revenue and Expenditure was concerned, became ex-|
ceedingly simple, since one or both was regarded as relatively fixed foil
short periods.

Necessarily there would be a surplus either of Ordinary Revenue over j
Ordinary Expenditure, or conversely. In the former case, such surplus
was available for defraying Extraordinary Expenditure and to that
extent it prevented the necessity of raising as much Extraordinary
Revenue. The system of allocating fixed sums to the different depart-
ments was wanting in elasticity, and it frequently became necessary to
augment these grants. Even when such augmentation was permanent,
as for instance that occasioned by the rise in prices in the reign of
Elizabeth, there was a tendency to maintain the old rate of allocation
as the Ordinary Expenditure and to treat the additions to it as Extra-
ordinaries. The other great extraordinary outlays were those on war
and the repayment of loans with the charge for interest. Under the
same head, though these were comparatively rare in the time of Eliza-

1 This was expressed by the phrase " that the king should live of his own " — The
Antiquities and Curiosities of the Exchequer, by Hubert Hall, London, 1898, p. 183 ;
cf. the speech of Sir Nicholas Bacon in Parliament 1571 — '^ Like as the ordinary
charge has always been borne by ordinary revenues, so the extraordinary charge
hath always been sustained by an extraordinary relief. This to those that be
understanding is known, not only to be proper to Kingdoms and Empires but also
is, and hath been, a necessary peculiar pertaining to ail Common-wealths and private
states of men from the highest to the lowest ; the rules of reason hath ordained it so
to be" — The Journals of all the Parliaments during the reign of Queen Elizabeth,
collected by Sir Simonds D'Ewes, London, 1682, p. 137.

Div. XV.] Ordinary and Extraordinary Otitlay 489

beth, are to be classed the purchase of lands, gifts in money and, generally
speaking, any other disbursements, not provided for by the ordinary
charge.

To meet these, there was the Extraordinary Revenue and the surplus,
if any, from the Ordinary Revenue. In the second half of the sixteenth
century, the former consisted of the grants from Parliament, the sale of
Crown property, the proceeds of prizes and the sums realized by loans.
Here, as in the Ordinary Revenue, it was usual to ear-mark certain
funds for certain purposes, by setting aside definite receipts to meet
special disbursements. When, as in the case of a military or naval
expedition, these extended over a considerable period, the gathering in
of the resources for this purpose was similarly protracted ; and it was
only after a considerable time that the two accounts balanced. Under
these circumstances, even were complete annual statements of revenue
and expenditure available, such statements would not present the clearest
view of the situation. Indeed, this method would involve the forcing of
the figures into a mould, to which they are not adapted. For, while the
Ordinary Revenue and Expenditure were treated on the basis of a year
being the unit, this was not so with the Extraordinaries. It follows
then, if data can be obtained for the annual Ordinary Revenue and
Expenditure and also for the Extraordinaries over a period of years, that
the best results will be obtained by working on a sufficiently enlarged
basis, which will include in a single statement all the cognate Extra-
ordinaries.

In this investigation the first step is necessarily to obtain an estimate
of the Ordinary Revenue and Expenditure at different dates ; and, since
the data must be treated comparatively, it is essential that the statements
used should either be compiled in the same form, or else should be easily
reducible to a single type. An examination of the statements for
1560-1, 1571-2, 1575-6, 1588-9, and the annual average of the five
years 1598 to 1603 shows that there are considerable diversities in
the mode of presenting the accounts. For the year 1588-9, the
Ordinary Revenue is recorded as the whole sums received on account of
the Crown, while the Ordinary Expenditure is of two kinds, namely the
amounts paid by the collectors, and secondly those accounted for at
the Exchequer ^ This is an exceptional form of account ^ ; and, in those
of the years 1571-2, 1575-6 and 1598-1603, the sums, "paid by
collectors,"*' are represented by "deductions" from the total Ordinary
Revenue, and the same method is followed in the estimate for 1 560-1 ^
The balance after these deductions may be described as the nett Ordinary
Revenue, though this use of the term is liable to give rise to some

^ Vide infra, p. .516. ^ It was drawn up in 1610. ^ yifj^ ififra^ pp, 512-I7.

490

Crown and National Finance [div. xv.

858 18 If

1,043 12 10^

1,404 15 2^

224 0 0

2,787
43

4 2

2 0

misapprehension, inasmuch as the deductions belong to two different
classes. Some of them consisted of the expenses, connected with the
gathering in of the revenue, while others were outlays, arising out of
the government of the country, as for instance the Diets of Judges &c.
and disbursements at Berwick in 1588-9. The following account of the
deductions in 1571-2 (which it was impossible to include in the tabular
statement for that year) will show their miscellaneous character.

Details of "the Dediwtions'' 1571-2.

£ s. d.
Creations and other inheritances, as well to noblemen as

to their heirs and to divers Colleges and Hospitals in

perpetuity ... ...

Deductions by act of Parliament [i.e. to Sheriffs] and by

grants ... ...

Fees and wages of officials

Life-annuities

Diets of Justices of Assize, wages of Justices of the Peace,

Clerk of the Peace, expenses Sheriffs at Assizes, travelling

expenses of prisoners ...

Hay for deer in the royal parks

Total deductions out of ' ^ Ancient Revenue ^ "

Fees, salaries, diets and expenses

Pensions and annuities (which had been in 1561-2

£17,464. 19«.)

Stipends and salaries of curates and schoolmaster and

alms to the poor ...

Repairs ... ...

Forts

Fees and diets of the Lord President and Council of the

North

Fees and diets of the Lord President and Council in the

marches of Wales with £250 for Judges in Wales

Royal stud

Total deductions out of the " Revenue, lately annexed to the

Exchequer" ... ...

Deductions, '' Hanaper of the Chancerie" — Fees, wages,

diets, livery and other allowances to the Lord Keeper

and others ... ...

Deductions Butlerage — Accountants' fees
Wine allowed for yearly

Expenses to auditor

Total deductions Butlerage 277 13 4

6,361 12 4|

8,086 0 4

8,577 16 1^

3,274 16 8^

673 3 6

3,318 11 8^

1,250 0 0

1,356 13
100 12

4
2

26,637 13 10^

2,222 2

100 0

167 13

10 0

0
4
0

Strictly speaking, the method of including under one head the cost
of collecting the revenue, the expense of administering justice in the

1 The particulars of "the Ancient Revenue" are given in A Treatise on the Court
of Exchequer, London, 1758, pp. 11-27.

Div. XV.] G^'oss and Nett ''Ordinary Revenue'' 491

provinces, the repair of forts and miscellaneous pensions was illogical,
and was only justified by the convenience of paying out money in the
neighbourhood where it had been collected, in order to avoid the charges
for sending it to London and back again \ This practice gave rise to
two important consequences. First what has been called the nett
Ordinary Revenue was less than the total Ordinary Revenue after the
deduction of charges of collection only. On the other hand, the Ordinary
Expenditure is similarly diminished, by these items being taken out of
the receipts directly. The chief result of this practice is to render it
somewhat difficult to state precisely what the Ordinary Revenue was
after providing for the expense of collecting it, but it is fortunate that
the balance between Ordinary Revenue and Ordinary Expenditure
remains unaffected, and it is with this balance that we are chiefly con-
cerned. Indeed, as will be seen, the great question in the treatment of
Elizabethan finance is to what extent the surplus on the ordinary account
was available to help to meet extraordinary expenditure. The second
consequence of the practice, just mentioned, is that the accounts of the
receipts and issues of the Exchequer can only record nett revenue, since
the deductions did not come within the purview of the tellers. More-
over they made no clear distinction between ordinary and extraordinary
receipts or issues. Not only is it necessary to allow for the fact that the
items in these accounts, that are to be classed as Ordinary Revenue, are
nett, that is, after the deductions had been made, but also that two
important branches, namely the Duchy of Lancaster and the Court of
Wards, are omitted. The proceeds of these were dealt with in the
following manner. The income of each, up to a specified sum, was
assigned to certain departments, and either branch only appears in the
receipts, when it yielded something over and above the amount of the
assignment on it. Thus the entry in 1599-1600 of ,^^4,000 from
the Duchy of Lancaster"^ means that this was additional to e^^l 1,000, the
amount of the assignment. This is the only case in which there is any
increase on the specified sum recorded. Therefore, when the actual
receipts or issues of the Exchequer are compared with the nett Ordinary
Revenue or Expenditure, it is necessary to add to both sides of the
former the amount of these assignments, which, for the period of these
accounts, was c^l 1,000 for the Duchy of Lancaster and £\%000 for the
Court of Wards, making ^23,000 in all. Part, if not the whole, of
the income from the Hanaper of the Chancery was similarly treated, also
New Year's gifts and temporalities, but the aggregate of these is not

^ The "porterage" of treasure to London varied from |% to IYLj apart from
the cost of the guard — Issue Books, East. 34 Eliz. — East. 35 Eliz. — Extraordinary-
Warrants.

2 Vide infra, p. 521.

492 Crown and National Finance [div. xv.

large. Similarly the sums realized from prizes are not recorded, and
those received from loans contracted or from sales of land are sometimes
included, but are also often omitted. Thus, while the latter are stated
from 1599-1600, between that date and 1590 there was a separate
treasury for these funds, and it is noted that Sir Thomas Sherley, the
Treasurer at War for the army abroad, received from May 1586 to April
1597 the sum of ^1,320,995. 18^. 5\d. out of the receipt of the Exchequer
or of the sale qflands^. Thus the question of the comparability of the
accounts of nett revenue with the recorded receipts of the Exchequer
arises. In view of the limitations of the latter it is to be expected that
there would be considerable discrepancies ; but, when the different
methods are allowed for, the correspondence of the two series is striking.
There is an opportunity for making this comparison in the year 1588-9,
Michaelmas to Michaelmas. Owing to the year of the Exchequer
receipts being from Easter to Easter and the book of the half-year
Easter to Michaelmas 1588 being lost, the other half-year (Michaelmas
1588 to Easter 1589) could not be included in the tabulated series of
Statement E. Adding that half-year to the one immediately following,
a whole year is obtained, which is comparable with the revenue 1588-9
on Statement D. The result may be expressed in the following table :

Comparison of Nett Revenue and Receipts of the Exchequer^
Mkh. 1588 to Mich. 1589.

A . Receipts of the Exchequer ... ... ... 344, 742

Add Duchy of Lancaster and Court of Wards 23,000

New Year's Gifts and Temporalities ... ... 2,632

Hanaper of the Chancery (estimated) 2 5,000

Prizes and Benevolence ... ... ... 9,298

Total nett Receipts, Ordinary and Extraordinary ... 384,672

B. Whole Revenue £420,577

Less deductions 36,400

384,177

1 State Papers, Domestic, Elizabeth, cclxiii. 122.

2 In the account of the revenue 1588-9 (vide infra, p. 516) the Hanaper of the
Chancery is included with the Alienation office. The income from the former was
£3,669 in 1575-6 and £8,483 on an average from 1598 to 1603 (in the Statement
D (i) the item '' Hanaper" includes Hanaper of the Exchequer also). As there was
a great eifort made to increase the revenue after 1590, the receipts from this source
are estimated at £5,000 for 1588-9. There is some difference between the two
accounts in the treatment of debts — the Exchequer receipts noticing only Installed
Debts while the revenue account gives this heading and money borrowed as well,
but the totals nearly agree. The following are the details :

Exchequer Account of

receipts revenue

£ £

Installed Debts 36,175 9,177

Loans — 28,107

Total 37,284

Div. XV.] " The Issues of the Exchequer " 493

Turning now to the accounts of the issues of the Exchequer, an
important difference is to be noticed between Statements G and H and
those printed by Gardiner in his History for the following years. The
former show the actual payments, recorded as made in each year,
whereas Mr Gardiner endeavoured to state, not the actual disburse-
ments, but the charges incurred, irrespective of the date when they were
discharged ^ It seems to me safer to deal with the actual payments of
each year, leaving it to the state of the debt to show how far habilities
beyond these had been contracted.

Like the receipts, the issues of the Exchequer have their limitations.
They do not distinguish between Ordinary and Extraordinary Expendi-
ture, and they present only a very partial view of the payments of
principal or interest on account of borrowings. The first defect is
capable of remedy by deducting the Ordinary Expenditure from that
recorded, while the balance (if any) will constitute the Extraordinary
Expenditure. The chief value of these statements consists in comparing
one year with another, with reference to the growth or decrease of outlay
under some special head ; and further, when cautiously used, they afford
some check on a different type of documents, such as those summarized
in Statement I.

Bearing these facts in mind, it becomes possible to make some
attempt to reconstruct the general course of Elizabethan finance, and
thereby to provide a more connected account of it than it was possible
to give in Part I. of the present work. The nett Ordinary Revenue,
during the reign of Mary, averaged about ^£^200,000 a year^. When
Parliament met in 1559, steps were at once taken to recover the annual
Tenths and First Fruits of the Clergy which had been remitted by Mary.
These additions were expected to produce over ^£'26,000 a year clear^,
but the actual yield in 1562-3 was under ^19,000 and less than ^17,000
in 1564-5^. It would appear then that the Ordinary Revenue of Eliza-
beth, during the first twelve years of her reign, should have been on an
average upwards of ^220,000, indeed the estimate for 1560-1 and the
two following years places it at ^246,000 ^ This proved to be an over-
estimate, and the actual Ordinary Revenue of 1558-9 and 1559-60 was
subject to great decreases in the subsequent years, through exceptional
and unforeseen circumstances. The joint effects of outbreaks of plague

1 History, 1603-16 (1863), ii. pp. 423-4.

2 This figure is arrived at by taking the average of the receipts of the Exchequer
during the reign of Mary (printed in Calendar of State Papers, Foreign Series, 1559-60,
p. cxv), deducting the estimated amount of the subsidies {vide infra, p. 526) and adding
the income of the Duchy of Lancaster and the Court of Wards {ibid., pp. 512, 513).

3 Ibid., p. 512. ^ Ibid., p. 513.

^ Ibid., p. 512. The estimate for 1560-1 includes an extraordinary item of £30,000
arising out of gross profit on the re-coinage.

494 Crown and National Finance [div. xv.

and other interruptions of commerce occasioned a serious reduction in
the proceeds of the customs and impositions. Thus the actual customs
collected on cloth, during the three years 1561-2, 1562-3, 1563-4, show
a decrease of over 40 per cent, as compared with 1558-9, 1559-60 and
1564-5, though the latter were not specially prosperous \ The recorded
ordinary revenue, after adding the estimated income from the Duchy of
Lancaster and the Court of Wards, came to ^£^190,000 from Mich. 1562
to Mich. 1563 and to ^^78,000 from Mich. 1564 to Mich. 1565^. Since
moreover it was no more than ^£'209,91 2 in 1571-2^, it may be estimated
that for the first twelve years of the reign of Elizabeth the nett Ordinary
Revenue was rather under than over .£''200,000 a year on the average.

One of the first acts of the administration of Elizabeth was the over-
hauling of the whole machinery of the government, and drastic reductions
were made in the Ordinary Expenditure which was fixed in 1560-1 at
£^1 34,760 a year. Since it remained at almost the same sum in 1571-2*,
the average of the two may be taken as the charge under this head up
to 1570. There are some omissions in the estimate, especially in the
case of Ireland, where the Ordinary Revenue did not suffice for the
Ordinary Expenditure. Since however it was long before accounts were
available, this item was allowed to run on^

The thorough investigation of the financial situation in 1558-9 had
other results. It was found that there was a total debt outstanding of
^227,910. 19^. M., of which ^106,649. Bs. Sd. was due abroad «. Interest
on the latter, including commissions and charges for renewals, was
between 12 per cent, and 14 per cent., which was described in 1559 as
a "biting'' charge and elsewhere as an "eating corrosive^'' The large
amount of the debt was not only dangerous, in so far as the interest
made inroads on the surplus of the Ordinary Revenue over Ordinary
Expenditure, but also, since the various loans were all due for repayment
at early dates and Elizabeth's position was so insecure, there might be
great difficulty in obtaining renewals. This was a case which might
have appropriately been met by a grant from Parliament, but the situa-
tion was so critical in 1559 and 1560 that there were even more urgent

1 Total Customs on cloth, three years 1558-9, 1559-60, 1564-5, £139,420;
three years 1561-4, £80,840 — A History of the Custom-Revenue in England j by
Hubert Hall, London, 1892, ii. p. 234.

2 Vide infra, p. 513.

3 Ibid., p. 514. The influence of the sales of land, to be noticed below, tended to
check the recovery of the Ordinary Revenue, since there was pro tanto a loss of rent.

* lUd., p. 515.

fi Acts of the Privy Council, 1558-70, pp. 14, 50, 54, 58, 66, 192, 259, 276.
® Vide infra, p. 510.

' The Journals of All the Parliaments during the reign of Queen Elizabeth, collected
by Sir Simonds D'Ewes, London, 1682, pp. 13, 245.

Div. XV.] State of the Finances 1558-9 495

demands on the finances. The country was ill-prepared to defend itself
against any of the foreign attacks which appeared to threaten at the
beginning of the reign of Elizabeth. The Ordinary Expenditure of
^6^12,000 a year on the Navy would be far from sufficing, if this force
was to be efficient. Further, only ,^^1,000 a year was allowed for
ordnance, and it was known that munitions of all kinds were required,
as soon as possible and in immense quantities. Therefore, although the
Ordinary surplus appeared considerable, it would not suffice for either of
these pressing charges, much less for both. It is true that, at the
accession of Elizabeth, there were the arrears of the last parliamentary
grant, made to Mary, but these would barely suffice to pay for the
funeral of the one and the coronation expenses of the other sovereign ^
When Parliament met in January 1559, the position was anxiously con-
sidered, and the situation was summed up by Sir Nicholas Bacon, the
Lord Keeper, in the following terms — " If a man consider the huge and
most wonderful charge, newly grown to the Crown, more than ever hath
heretofore been wont and now of necessity to be continued ; as first, the
maintenance of garison in certain places on the sea coasts, as Ports-
mounth, with new munition and artillery, besides the new increased
charge for the continual maintenance of the English navy to be ever in
readiness against all evil happs^; the strongest wall and defence that
can be against the enemies of this island ; and further also the new
augmentation or charge for the maintenance of a garison at Barwick and
the frontiers northward. Indeed, I must confess that in those matters
mine understanding is but small and mine experience and time to learn,
less; but in mine opinion, this doth exceed the ancient yearly revenue
of the Crown. Besides, that double so much is of necessity to be
presently spent, about the fortifying of those places in buildings'." The
" ancient revenue of the Crown " may be taken at ^100,000 a year nett*,
so that thrice that sum represents ^^300,000. The grant, made by this
Parliament, realized ^191,000% so that, if the whole programme were to

* In Cobbett, Parliamentary History of England, i. p. 1066, these outlays at the
accession of James I. were given at £50,000. The sum charged on the office of the
Wardrobe for the funeral of Mary was £7,622. 19*. (State Papers, Domestic,
Elizabeth, i. 33; cf. Calendar, Foreign Series, 1558-9, p. cxxviii; Diary of Henry
Machyn, Citizen and Merchant-Taylor of London, 1550-63 (Camden Soc. 1848),
pp. 182, 183.

2 Mr Oppenheim (Naval Tracts of Sir W. Monson — Publications Navy Records
Soc, XXII. p. 8) takes the Ordinary charge of the Navy — at first £12,000 (cf.
infra, p. 612), in 1564 £6,000, soon afterwards £7,695 (cf. ibid., p. 515)— as
representative of the whole outlay on this branch. It only provided for the expenses
of the ships in port— Add. MS. (Brit. Mus.) 34,729, f. 6.

3 D'Ewes, Journals, ut supra, p. 13.

* " Revenue of the Pipe" in Statement B (i), vide infra, p. 512.
5 Ibid., p. 526.

496 Grown and National Finance [div. xv.

be carried out, the surplus from the Ordinary Revenue would have to be
drawn upon to the extent of ^^1 09,000. Though there was an average
surplus at this time of about c£*65,000, it was necessary to pay interest
on the foreign debt regularly, and this charge would require about
,5^15,000 a year, reducing the annual balance available to ^^50,000.
Thus the scheme for the defence of the country would have required,
besides the grant from Parliament, the available surplus from the
Ordinary Revenue till the end of 1560.

Financial Estimate 1559 (Jan. — Feb.).

Sir N. Bacon's estimate of the sums required for the defence of

the Realm 300,000

To meet which charge there was available —

(1) The Subsidy of 1559 191,000

(2) Surplus from Ordinary Revenue till end

of 1560, after paying interest 105,000

296,000

Very soon after the scheme for the re-arming of the country had
been agreed upon, further resources were required, through the cost
of the expedition sent to Scotland in 1559. There were thus three
main claims on the surplus Ordinary Revenue and the subsidy of 1559.
First those for munitions, for the payment of loans and interest at the
dates agreed on and, lastly, to keep the army and the fleet supplied.
The strain on the finances is manifested by the numerous and urgent
demands upon the Exchequer and the immense difficulty found by
Winchester, the Treasurer, in providing funds \ It shows the deter-
mination of Elizabeth that, in spite of the fresh calls on the resources
of the Crown, the original re-armament scheme was carried out as far
as possible, and in 1560 a single account of Gresham's for munitions
came to £108,956. ISs. ^d? This course involved the temporary
financing of the cost of the operations in Scotland — a difficult operation
at this period. There was just one method by which this could be
effected, namely by using the purchases of munitions in the Low
Countries as a lever for obtaining increased loans there. This proved
effectual for the time, and on April 15th, 1560, the debt due at
Antwerp was returned at =£^279,565. 10<y.^ So great obligations abroad,
added to those at home, made the financial situation one of great
danger, especially since the interest and charges on the foreign debt
absorbed more than half the surplus Ordinary Revenue. Rather than

^ State Papers, Domestic, Elizabeth, xii. 20, 53.

2 The Life and Times of Sir Thomas Gresham, by John William Burgon, London,
1839, I. p. 479.

2 Ibid., I. p. 490; Calendar State Papers, Foreign, 1658-9, p. 569.

Div. XV.] War- Expenditure 1560-70 497

appeal to Parliament, Elizabeth decided to sell a part of the Crown
lands. The proceeds in 1561 came to ^^171,866. 15^. M} By a
return, dated April 30th, 1562, the debt at Antwerp was reduced by
almost exactly this amount, being ^^109,213. 6.9. Flemish^ Since how-
ever there were no funds, beyond the surplus Ordinary Revenue or sums
diverted temporarily from the grant for munitions and fortifications,
to meet the outlay on the operations in Scotland, which had cost
J'l 78,820 ^ the condition of the finances remained unsatisfactory. The
situation was complicated by the large sums required for the Newhaven
Expedition, on which d^246,380 was spenf. To relieve the stringency,
which was often very serious, in the Parliament of 1562-3 a grant was
made, payable in 1563, 4, 5, which produced dg'207,722, and to this is
to be added that of the clergy. As these various monies came into the
Exchequer, debts were paid and by May 20th, 1565, the obligations,
then outstanding, were returned at ^85,144 \ It appears however
that this statement is somewhat too favourable, since it does not take
account of loans on Privy Seals, a method by which the supplies from
Parliament were anticipated, without interest being paid. Taking this
fact into account, and also that, except towards the close of the reign,
these borrowings were punctually repaid, the Privy seals may be neg-
lected, as long as the chief outlays on the one side and the extraordinary
income towards balancing them on the other are treated together in
their order. It was hoped, by the grant from Parliament of d6*l 09,000
in 1556, payable in 1567, 8, 9, the cost of warlike expeditions could be
extinguished, but it unfortunately happened that the outbreak of
O'Neil's Rebellion involved further expense. Since the accounts were
not closed till 1573, the treatment of this outlay may be conveniently
postponed until after 1570; but, within the period 1561 to 1570, there
are included the additional disbursements, due to Norfolk's Rebellion,
which amounted to <^92,932^ Since all the subsidies of the clergy
and laity, granted up to 1566, were due to have been paid by 1569,
it will be convenient to present a view of the whole financial operations
in a concise form for the ten years from 1561 to 1570, including therein
the providing of funds for the Scottish Expedition, but excluding those
for the first years of O'NeiFs Rebellion, which were met by loans on
Privy Seals, payable out of the Parliamentary grant of 1571. First
of all there was the Extraordinary Expenditure of the Scottish and

1 State Papers, Audit Office, Declared Accounts 593/1, The Account of Thomas
Gardner (1561).

2 Burgon, Life of Gresham, ut supra, i. p. 490.

3 Vide infra, p. 527. * thid.

5 lUd., p. 511. In Feb. 1566 the loans in the Low Countries were stated to
have been £1^2,500— Calendar State Papers, Foreign, 1566-3, p. 21.
^ Vide infra, p. 527.
8. 0. III. 32

498 Crown and National Finance [div. xv;j

Newhaven expeditions and on Norfolk's Rebellion. These outlays
amounted to .^518,1 32». Taking the debt, due at home, in Flandei
and to the assigns of the Genoese bankers, at ^100,000 in 1570, thei
would have been a sum of c£^127,900 paid off on balance^, making a|
total Extraordinary Expenditure under these heads of £Q4iQ^0^% Tol
meet this there had been realized by Parliamentary grants ^£^376,722
and by sale of lands ^171,866, making total Extraordinary Receipts j
of ^£^548,588 leaving a deficit, as compared with the specified Extra-4
ordinary Expenses, of <£97,444. This deficit must be deducted from
the surplus of J*65,000 a year from the Ordinary Revenue, reducing
it to one of about ^^55,000 annually on an average on both accounts.
The question next arises as to how that surplus was dealt with. The
personal expenses of Elizabeth and of the Court were kept very low,
nor were any considerable gifts of money made — "The Queen," Sir
Robert Naunton writes, "was never profuse in the delivering out of
her treasure but payed many, and most of her servants, part with^
money and the rest with grace . . . We have not many presidents of hejl
liberality or of any large donatives to particular men... Her reward*
consisted chiefly in grants of leases of offices, places of judicature but
for ready money and in any great summes, she was very sparing which
we partly conceive was a virtue rather drawn out by necessity, then
her nature, for she had many layings out, and to her last period^."
Failing personal expenditure of Elizabeth or any considerable gifts to
her favourites, there were many items of further Extraordinary Expen-
diture. Interest on such part of the loan as had been borrowed abroad,
or in certain instances at home, had to be paid. This accounts for a
considerable sum up to the time when sufficient of the proceeds of the
sales of Crown lands had been used for the reduction of debt, and it
continued an important element till 1570. Then, after the provision
made for the purchase of munitions and the increase of the Navy to
the end of 1560, there were still great Extraordinary Expenses in con-
nection with both these branches, beyond such as were included in the
accounts of the Scottish and Newhaven expeditions ^ Further, after
the forces had returned from Scotland, money was sent there, while

1 Vide infra, p. 527. ^ /^^^^ p. 510.

3 Fragmenta Regalia, or Observations on the late Queen Elizabeth, by Sir Robert
Naunton, 1642, pp. 7, 29. Elizabeth, however, was in the habit of making loans to
her favourites, some of which were afterwards remitted. Thus by a return, dated
1579 (State Papers, Domestic, Elizabeth, cxxxi. 49), she had lent £32,600 within the
realm. Of this £1,900 was due by the society of Mines Royal (vide supra, 11. p. 391),
£3,000 by Sir Rowland Hayward and others of the City of London. Of the balance,
as much as £21,000 had been lent to the Earl of Leicester.

* D'Ewes, Journals, ut supra, pp. 79, 131 ; Cobbett, Pari. Hist. pp. 635, 716.
D'Ewes states that the third payment of the subsidy (made in 1566), and due in
1668-9, was remitted by Elizabeth.

Div. XV.] Revenue and Expenditure 1560-70 499

there were yet further extraordinary outlays in the carrying on of
the home government, occasioned by the need for frustrating real or
imagined plots against Elizabeth. Closely connected with these, again,
were the payments, that had to be made, for other secret or special
services; so that altogether the surplus from the Ordinary Revenue
had very many calls upon it ; and, Elizabeth was far from being in a
position to carry out many of her designs, through want of sufficient
funds. In fact it was only the stringent supervision of her Ordinary
Expenditure that enabled her to accomplish so much.

The various items of Extraordinary Expenditure and Revenue can
be again co-ordinated ten years later towards the close of 1580. The
outlay on the Rebellions in Ireland, to be paid from 1571 to 1580, came
to .5^485,401 \ Further, since at the end of 1580 Ehzabeth had paid
off the loans bearing interest^, there was a reduction of debt on balance
of ^100,000 making total extraordinary disbursements, under these
heads, of =£^585,401. The subsidies of the laity and clergy, voted in
1571 and 1575-6, the last instalment of which was payable in 1578,
realized ^416,852, leaving a balance to be borne by the surplus of the
Ordinary Revenue, amounting to ^^168,549. Great economy continued
in the Ordinary Expenditure, that for the year 1571-2 being below the
estimate of 1560-1. Four years later (1575-6) the whole ordinary
outlay was ^17,500 larger, but the difference is accounted for by the
inclusion of " Ireland," to which a grant of £9>0^000 was now made ;
so that, apart from this new charge on the Ordinary Revenue, the
Ordinary Expenditure in 1575-6 showed a small decline compared
either with 1560-1 or 1571-2. This achievement was all the more
creditable in view of the rise in prices which had now begun. Taking
the average Ordinary Expenditure of these two years at .^140,000, as
representative of the whole decade, and similarly the Ordinary Revenue
at ^210,000 there was a surplus of <^70,000 a year\ From this has
to be deducted the deficiency of the Extraordinary Revenue, which over
the whole ten years averaged ^£^1 7,000, annually, leaving a surplus,
available for other Extraordinaries of something over =£^50,000 a year.
From 1571-1580 the interest on loans was very considerably less than
it had been in the previous decade. It was not as if the debt at
interest had been gradually and progressively reduced from 1571.
Rather, great efforts had been made from 1571 to 1574 to effect large
repayments, as much as ^59,670. 15*. ^d. having been extinguished in
the year 1573-4 (Mich, to Mich.)^ This happy result was alluded to
in Parliament in 1576 as the delivery " of this kingdom from a great
and weighty debt, wherewith it hath been long burdened. A debt

1 Vide infra, p. 627. ^ D'Ewes, Journals, p. 287. ^ Vide infra, pp. 514, 515.
4 Eg. MS. (Brit. Mus.) 2,723, ff. 57 b, 60 b (The Accounts of Sir T. Gresham
and Spinola),

32^2

500 Crown and National Finance [div. xv.j

begun four years at the least before the death of King Henry the
Eighth and not cleared until these two years, and all that while running
upon interest, a course able to eat up not only private men and their
patrimonies, but also Princes and their estates ; but such hath been the
care of this time, as her Majesty and the State is clearly freed from
that eating corrosive, the truth whereof may be testified by the citizens
of London, whose bonds under the common seal of the City of assurance
of payment being usually given and renewed and which have hanged
so many years to their great danger and to the peril of the whole
traffic^ are now all discharged, cancelled and delivered into the Chamber
of London to their own hands^" While this statement may be ac-
cepted as applying to the debt in Flanders and at home, there appears
reason to believe that there remained in 1576 a liability to the assigns
of the Genoese bankers, who had consigned the treasure to Alva in
1568, which had been detained by Elizabeth. If this particular loan
had been temporarily paid off in 1576, fresh borrowings were made
from the same lenders almost immediately afterwards. These appear
to have been repaid by the end of 1580. Besides the provision of
interest out of the surplus Ordinary Revenue, there was the assistance
which continued to be given to the Protestants in Scotland and France,
and (towards the end of this period) to those in Flanders. Part of the
latter, which up to 1580 amounted to d^50,000, was borrowed by
Elizabeth herself and re-lent^, while the remainder was furnished from
her own resources, so that, under the form of statement here adopted,
it would be drawn from the surplus Ordinary Revenue. In addition,
the exceptional outlay on the Navy and Ordnance, which could not
be allocated to any special war or expedition, continued. According
to one series of accounts, from Easter 1570 to Mich. 1571 and again
from Mich. 1573 to Mich. 1574 the excess, over the sum allowed in
the Ordinary Expenditure, averaged over c£*20,000 per annum ^

^ The loans in Flanders were made on the security of the City of London.
Should Elizabeth default, the goods of merchants were liable to seizure. Cf. "We
ar informed that the factors of Brocktropp and Rantzom, (to whom we ar indebtted
in sondry sommes of monny, payable this August) ar come to Antwerp ; and doo so
persist in the demand of there monuy, as, if they may not have therof redy
payement, they will procede by order of law and arrest these ; wherin you and our
Merchants shall be in danger, besyde some touch of discredits " — Cecil to Gresham,
Aug. 26, 1563, quoted in Burgon, Life of Gresham, ii. p. 28 (note).

2 D'Ewes, Journals, ut supra, p. 245.

3 Life of William Davidson, by N. H. Nicolas, London, 1823, pp. 8, 9.

4 1570-1, Ordinary, 1573-4, Ordinary,
18 months 18 months 12 months 12 months

Ordnance ...

23,567

9,000

16,688

6,000

Forts

1,485

1,446

Navy

18,375

11,542

22,501

7,695

Totals 43,427 20,542 40,635 L3,695

In the same accounts the gifts made in money amounted to only £1,300 in the first

Div. XV.] Revenue from Prizes 1580-90 501

Again after a space of ten years the various parts of the Extra-
ordinary Expenditure and Revenue can be balanced in October and
November 1590. In the endeavour to reconstruct the finances from
1580 to 1590 there is a preliminary difficulty which must be first dealt
with. In the closing months of 1580 Elizabeth received her share of
the plunder, brought home by Drake from his expedition in the
Pacific. Since the amount was large, the receipt of it raises the
question of the effect on the finances of such extraordinary gains.
The main effect of subsequent captures, from one point of view, was
that these were off-set against the cost of the specific cruise in which
they were taken. Since, however, this element in the receipts was
uncertain, and, after 1590, it was considerably less than the outlay,
the situation will be clearer, if, as far as possible, the value of prizes
is included under the extraordinary receipts, and the expenditure on
minor naval expeditions added to that of the greater ones, though the
former is not included in the account of the war-expenditure. With
regard to sums received by Elizabeth from this source from 1580 to
1590, there is first of all the portion of the plunder of Drake's voyage
of 1577 to 1580 to be taken into account. If the calculations, made
elsewhere^, are approximately correct, she received from this source
between ^250,000 and i?300,000. The share she had in the expedition,
also of Drake in 1585, resulted in a loss to her of d^4!,000, but her
venture in that of 1587 yielded a profit of between dfe^42,500 and
^45,000 ^ Any gain from "the Portugal Voyage" of 1589 would go
to reduce the outlay on it, while in the same year a cruise of Frobisher
resulted in prizes valued at ,^15,000=^. To these may be added any
returns from the ventures of Cumberland in 1589 and of Hawkins and
Frobisher in 1590. Finally, there was the value of the Armada prizes,
though the income from this source from Mich. 1588 to Mich. 1589
is given at only <^4,878^. On the basis of these figures, the gain to
the Crown from prizes, either in money or in kind may be estimated
at d£*350,000 during the ten years. Turning now to the cost at which
the Crown obtained these receipts, there is first of all the case of
Drake's expedition of 1577-80. If Elizabeth was a shareholder to the
extent of 1,000 crowns, as asserted, this outlay would fall within the

18 months and to £350. 135. 9c?. in the second 12 months— Brit. Mus. Eg. MS.,
2,723, ff. 2b, 3b, 4b, 47b, 73b, 75b, 10b, lib, 67b, 68b, 20b, 21b, 70b,
71b.

1 Vide supra, Part i.. Chapter iv.

^ Ibid.

3 The Naval Tracts of Sir W. Monson, ed. by M. Oppenheim {Puhlications Navy
Records Soc, xxii. p. 239).

'' Vide infra, p. 516.

502 Crown and National Finance [div. xv.

previous decade, and she would be entitled to her dividend thereon of
4,700 per cent. She subscribed =£^1 0,000 in cash to Drake's next
voyage, and, as an adventurer of her ships, she would have to victual
them. On the basis of the ratio ruling at the time, this expenditure
may be taken at ^7,000^. Then the expeditions of Frobisher and
Hawkins (1589 and 1590) together cost ^17,275^, but much larger
than any of these was the Portugal Voyage. Elizabeth first intended
to contribute ^^20,000, but she was eventually compelled to disburse
d£*61,019^ Therefore the cost of the series of expeditions may be taken
at dfi'l 01,019, or omitting the Portugal Voyage at ^^40,000. Thus an
expenditure of .£'100,000 produced ^350,000 in prizes ; but, on analyzing
the figures, it will be noticed that the bulk of the gain depends on the
inclusion of the estimated amount received from Drake's expedition
into the Pacific — a profit of the nature of a fortunate chance, that was
unlikely to be repeated. Apart from this sum, the receipts from prizes
from 1580 to 1590 came to about .^^75,000, as against an outlay of _
d^l 00,000 on the expeditions. ■

This expense was inconsiderable as compared with the disbursements,
connected with operations on land. In 1581 and 1582 as much as
d^631,071 had been sent to the Duke of Alen^on*, while the cost of the
army in Flanders from 1585 to 1590 was ^663,850. The outlay on
the defeat of the Armada was returned at .^161,185, and on the
Portugal Voyage at c£'61,019^ To these expenses are to be added
other naval expeditions of the period, also the cost of three different
armies sent to France from 1587 to 1590, the latter amounting to
^46,468. 15*." This sum was over and above a loan to Henry of
300,000 crowns (or <^30,468. 15*.) in 1586, which Elizabeth herself
borrowed through Pallavicino^ Then there was the subsidy to James
of Scotland. By November 1596 the total for sixteen years had reached
^51,500, and on the average £S%000 of this would fall within the
ten years 1580 to 1590^ Taking these various items of Extraordinary

1 Hawkins' Book of the Whole Navy — State Papers, Domestic, Elizabeth,
cLxxxv. 38, printed in Papers relating to the Navy... 1585-7, edited by G. S. Corbett
{Publications Navy Records Soc. , xi. pp. 270-4).

2 State Papers, Domestic, Elizabeth, ccxxxiv. 75.

3 The Portugal and Cadiz Voyages cost the Crown (vide infra, p. 527) £112,652
The outlay on the Cadiz Voyage was (State Papers, Domestic,

Elizabeth, cclxv. 68) 51,633

Portugal Voyage £61,019

* State Papers, Foreign (France), x. 158.
^ Vide infra, p. 527.

6 State Papers, Domestic, Elizabeth, cclxv. 102.
"^ Ibid., ccLxxi. 84.

* Ibid., ccLxvi. 121.

Div. XV.] Revenue and Expenditure 1580-90 503

Expenditure the Crown had to find upwards of dfi*l,650,000 from 1580
to 1590:

Duke of Alen§on 631,071

Cost of operations in Flanders, 1585 to 1590 663,850

Resisting the Armada... ... 161,185

Expedition to Portugal 61,019

Other naval expeditions 40,000

Operations in France, 1587-90 46,468

Subsidy to James VI. of Scotland, 1580-90 32,000

1,635,693

To meet this great expenditure there were the prizes (including that
taken by Drake in his voyage round the world), which may be esti-
mated to have produced for the Crown ,^350,000. The grants of the
clergy and laity during the period realized ^£^754,097^ making together
.^1,104,097, which still left ^531,496 to be provided. To meet this
deficit Crown lands were sold, which realized from 1589 to November
26th, 1590, ^£126,3052. Of the ^400,000 still remaining, a part was
found by borrowing. According to a statement made by Salisbury in
Parliament in 1610, the loan outstanding in 1588-9 was ^200,000%
and it is improbable that this had been materially reduced on balance
at the end of 1590. This left ^200,000 to be found from the surplus
Ordinary Revenue*. Turning now to the Ordinary account, it may be
estimated that, during these ten years, there was an annual surplus of
about ^70,000 a year. Though the nett revenue had increased con-
siderably between 1575-6 and 1588-9, the Ordinary charge had also
grown, with the result that, as compared with the previous decade, the
surplus remained unaffected. The deficit on the Extraordinary Revenue
would reduce this Ordinary surplus to J*50,000 annually on an average.
Further there remain a number of expenses still to be taken account of,
and which had to be paid from this source. Successive Catholic plots
had added to the cost of government at home. Thus in 1588-9 there

1 Vide infra, p. 526.

2 State Papers, Domestic, Elizabeth, ccxxxviii. 30. Up to 1592 the proceeds
were £130,462. 9«. 3|6?.— Audit Office, Declared Accounts 593/2 (Account of Thomas
Freke, 1589-92).

3 Journals of the House of Commons, i. p. 395.

War-expenditure

£1,635,593

Subsidies

£754,097

Prizes

350,000

Lands

126,305

Loan

200,000

1,430,402

Balance £205,191

504 Crown and National Finance [div. xv.

was spent, extraordinarily, as much as ^^30,000^ on Secret Service; and,
although the need for intelligence must have been specially great in that
year, the outlay in this way over the whole period was large 2. Then
the imprisonment of Mary of Scotland, as well as the expenses of the
English agent in Scotland, had to be paid for out of the small balance
remaining of the ordinary surplus. Further, doubts as to the intrigues
of Spanish emissaries in Scotland occasioned further expense in the
strengthening of the defences on the borders and the increase of garrisons
there. Thus the outlay on Ordnance in the North Parts, which had
been under .£'500 a year from 1569 to 1576, was increased to i?2,750
per annum on an average from 1576 to 1583^. Finally, with the
renewal of borrowing on a large scale, funds had once more to be
found for those, who lent money at interest.

The various extraordinary receipts and payments from the end of
1590 till the close of the reign of Elizabeth naturally group themselves
in a single series. First of all there were the naval expeditions. The
cost to the Crown of the fleet, commanded by Howard in 1591 was
^17,349^ Elizabeth subscribed ^3,000 to the venture of Raleigh in
1592^, and that of Drake and Hawkins in 1595-6 cost her at least
c£^28,000^ or altogether ^48,349. The larger expeditions, known as
the Cadiz and Island Voyages involved an outlay of ^£^1 21 ,240^, making
a total of close on i^l 70,000 up to the beginning of 1598. During
these seven years there was other expenditure on the fleet ; and, if
c£'30,000 be added to cover this, an approximate estimate of the extra-
ordinary disbursements on the Navy till that date is arrived at. During
the last five years of the reign of Elizabeth the whole cost of the Navy
(both Ordinary and Extraordinary) is returned at ^£^418,554^ Another
similar account for the same period gives the total as c£*336,465^ In
any case allowance has to be made for the Ordinary charge and for any
of the cost of the Islands Voyage which fell within the later period.

1 Vide infra, p. 516. 2 ^^^1., pp. 522, 523.

3 Audit Office, Declared Accounts 1832/2 and 4 — (Account of Thomas Sutton,
Master of Ordnance in the North Parts, March 1, 1569 to 1576) £3,358. 3^. M. (of
the same, March 1, 1569 to September 29, 1583) £27,012. 7*. lid.

'* State Papers, Domestic, Elizabeth, ccxl. 55.

^ Naval Tracts of Sir William Monson, ed. M. Oppenheim (Publications Navy
Records Soc. , xxii. p. 295).

6 State Papers, Domestic, Elizabeth, cclix. 61. Mr Oppenheim, ut supra, gives
the total cost of tliis voyage to Elizabeth as £42,000.

"^ Vide infra, p. 527. The documents, on which this statement is based, give
"Voyages by Adventurers," ^^ Cadiz," "Flanders" or "Flandes." This no doubt
is a mistake for "Flores."

8 Gardiner, History, 1603-16 (1863), 11. p. 408.

9 Vide infra, p. 517.

Div. XV.] War- Expenditure 1590-1603 505

In view of these considerations, the Extraordinary expense of naval
operations from 1598 to 1603 may be estimated at ^275,000, making
(with that of the expeditions from 1590 to 1597) ^475,000 for the
whole period. Other specific war-expenditure in the Low Countries,
France and Ireland is returned at ^3,057,226 ^ Moreover there was a
reduction of indebtedness on balance during this period. At the death
of Elizabeth there was a nett debt of ^^99,990 outstanding 2. If then
Salisbury's statement of the debt in 1588-9 is con-ect, .^100,000 had
been discharged in the interval, so that the Extraordinary expenses
amounted to ^3,632,226.

Extraordinary Expenditure 1590 (Oct.) to 1603.

War-expenditure, Flanders, France and Ireland £3,057,226

Naval expenditure (not included in above) ... 475,000

Loans paid 100,000

£3,632,226

Just a little less than one-half of the funds required was provided
by subsidies of the clergy and laity. These came to ^1,777,705. The
remainder was met by sales of land, prizes, repayments of loans due to
the Crown, proceeds of forfeitures of lands by persons convicted of
treason, with a few other miscellaneous receipts, while the balance
remaining was procured from the surplus Ordinary Revenue. There is
some difficulty in fixing the exact amount received from these different
sources. The whole sum, obtained by the sale of lands during the
reign, is given in Statement I as i?81 7,359. Deducting from this the
proceeds up to November 1590, there remains .^519,188, as the receipts
from this source till 1603. To some extent the years, in which sub-
divisions of the total accrued, can be traced in various accounts as

below :

26 Nov. 1590 to end of 15923 £ 4^157

1593 to Easter 1599 * [150,018]

1599-1600 Easter to Easter ... 202,350

1600-15 39,460

1601-2 103,938

1602-36 ... 19,265

£519,188

1 Vide infra, p. 527.

2 Exchequer of Receipt — (Miscellanea) 43 (3) — " A Collection of his Majesty's
Debts, distinguished in titles with the arrears thereof, due at Mich, last." This
debt is arrived at after crediting Elizabeth with the subsidies granted in her lifetime,
but paid after 1603. 3 Audit Office, Declared Accounts 593/2.

* On the assumption that there were not sales of lands, other than those taken
into account, before 1590. ^ Vide infra, p. 521,

6 Gardiner, History, 1603-16 (1863), 11. p. 414. In the Introduction to Parlia-
mentary Debates in 1610 (p. ix) the proceeds, during the last five years of the reign,
are stated to have been £372,000, possibly on the authority of State Papers,
Domestic, James I., xxxv. 29.

506 Crown and National Finance [div. xv.

There is some difficulty in estimating the sum received by the
Crown from prizes during this period. In 1593 Elizabeth obtain*
about .^'SOjOOO from the Madre de Dios, but only by her arbitrary
treatment of the other adventurers^; while the St Valentine, taken ii
1602, was valued at .^44,000 ^ According to Monson the cruise
Howard in 1591 "defrayed the better part of the cost,"" and there is
mention of a prize worth <i^l 0,000 being captured I Though the
Crown was the largest shareholder, others were interested, and th<
share falling to Elizabeth may be estimated at .^E'TjOOO. Again her^
proportion of the returns of the voyage of Drake and Hawkins in
1594 would be ^1,600^. It was difficult to recover the plunder, secured
by the sack of Cadiz in 1596. Valuables were traced to certain indi-
viduals, amounting to dfi'l 1,832^, while the proceeds of two ships, with
the bullion taken from the castle, were returned at .^12,700, of which
the Queen had one-third^, in addition to which she claimed the ransoms
for both individuals and the city''. These various valuations do not
include a number of items, such as goods, etc., so that altogether it
may be estimated that Elizabeth secured about ^10,000. Then there
was the Island Voyage of the following year (1597). Monson states
that three ships captured at an early stage " did almost then counter-
vail the expense of the whole voyage ^^ According to another account,
by November 1597, 14 prizes had been taken °, from which sufficient
cochineal and indigo had been secured to supply the whole country for
many years^ The latter commodity, alone, was valued at <£*10,000,
and it was thought of sufficient importance to necessitate a proclamation
prohibiting importation^". Considering that the Crown had to share
with the owners of other ships, it may be estimated that Elizabeth
obtained perhaps c^'SOjOOO from this expedition. The receipts then
from these voyages may be taken to have been about ,^160,000, and
to this d^40,000 may be added to cover the proceeds of the remaining

1 State Papers, Domestic, Elizabeth, ccxliv. 75. This ship was valued at £150,000
— Ibid., ccxuv. 1, 18, 35; Calendar Salisbury MSS., iv. pp. 253, 254. Elizabeth
retained all the pepper. This appears to have sold above the valuation, since the
Adventurers obtained £72,000 to £75,000.

2 The documents are printed in Publications Navy Records Soc, xxxiii. pp.
341-71.

3 Ibid., XXII. pp. 256, 260. * Ibid., p. 317.

6 State Papers, Domestic, Elizabeth, cclix. 120, 123, 124.
^ Ibid., CCLIX. 117.

7 Publications Navy Records Soc, xxiii. p. 14. ^ jbid^^ xxiii. p. 30.
^ State Papers, Domestic, Elizabeth, cclxvi. 43.

10 Calendar Salisbury MSS., vii. p. 473, viii. pp. 7, 36. It is highly probable that
the discharge of Essex and a dozen merchants from a bond of £21,000 "for cochineal"
in 1599 relates to this transaction— i/C^fers of John Chamberlain (Camden Society,
1861), p. 37.

Div. XV.] Revenue and Expenditure 1590-1603 507

cruises, concerning which there are no definite details, though it is
recorded that prizes were taken. Thus the whole receipts, from
this source, may be calculated to have been ^^200,000. Further, as
money was more and more needed towards the end of the reign,
Elizabeth began to press for repayment of her loans to Flanders and
France and she succeeded in collecting d£*32,377. Extraordinary fines
and forfeitures, with some miscellaneous credits added <^39,618^, so
that altogether an Extraordinary Revenue of c£^2,435,778 had accrued
since 1590.

Summary of the Finances 1590 (Oct -Nov.) to 1603.

Extraordinary Expenditure £3,632,226

Extraordinary Revenue —

Subsidies ...

Prizes

Sales of Land

Repayments of loans

Forfeitures and miscellaneous

£1,777,705

200,000

519,188

32,377

39,618

2,568,888
Deficiency £1,063,338

This deficiency was made good from the surplus Ordinary Revenue.
The statements of both income and expenditure of this nature for the
period are comparatively full. That for 1588-9 is representative both
of receipts and issues on the ordinary account, while another records
the average Ordinary Revenue for the last five years of the reign I It
is a little unfortunate that neither the latter account nor another
covering the same period^ gives the Ordinary Expenditure separately
from the Extraordinary, but this defect can be easily remedied by
allowing the usual ordinary provision for the "Navy," "Ordnance"
and "Ireland" and treating the remainder in each case as extraordinary,
as which it has already been dealt with. Some other items require to
be treated similarly (such as the cost of musters), so that the whole
Ordinary Expenditure from 1598 to 1603 may be taken to have
averaged d^225,000 a year. From 1590 to 1598 it was less, and the
average for the whole period from 1590 to 1603 may be estimated at
between ^200,000 and ^210,000— a sum about equal to the nett
Ordinary Revenue at the accession of Elizabeth. From 1590 onwards
great efforts had been made to increase the Ordinary Revenue. The
deductions were lower, and the customs and impositions had been

1 Vide infra, pp. 519-21 ; Gardiner, History, 1603-16 (1863), ii. p. 418.

2 Vide infra, pp. 516, 517.

3 Gardiner, History, 1603-16 (1863), ii. p. 408.

508 Crown arid National Finance [div. xvJ

advanced. From 1598 to 1603 the Revenue averaged .£325,000 nett^
but it was lower from 1590 to 1598. Therefore, over the whole interval
from 1590, it may be calculated to have been on an average about^
^300,000, leaving a surplus of from <£90,000 to ^100,000 a year.i
Over the period from 1590, this (together with any further Extra-
ordinary Revenue not included in the foregoing account^) sufficed to!
meet the deficiency, but it left very little towards paying the subsidy
to James of Scotland, or for any exceptional outlays in England,
such as interest or for secret service. It follows that the state of the
Crown finances involved very many 'anxieties, and it is not surprising
to learn that for several years after 1593 the interest on a loan made
by Pallavicino was in arrear^, or that in March 1603, on being informed
that her coffers were empty and that money was urgently required for
the army in Ireland, Elizabeth was reported " to have raged exceed-
ingly ^" Indeed, had it not been that the Ordinary Expenditure had
been kept as low as possible % there would have been great difficulty
in obtaining resources for the continuance of the struggle. Further, it
is clear there was no scope for the large gifts in cash to Essex and
others with which Elizabeth was credited. It is true that, during the
proceedings in the Star-Chamber after the revolt of Essex, Cecil stated
the gifts in this case had been " of the value of £300,000%" but these
took the form of grants of lands, of which that of the Royal Parks in
1592 was the most important, to which may be added the farm of
Sweet Wines on terms favourable to the lessee. It is important to
note the double aspect of such grants. On the one hand, in so far
as they did not consist of money, the previous calculations remain
unaffected by them, but, on the other, from a wider standpoint, they
had the effect of checking the natural expansion of the Ordinary
Revenue, since they represent a further alienation of Crown property
in addition to that recorded as sold, while similarly the farming of any

* Vide infra, p. 517. An account of the Revenue for the four years Mich. 1599
to Mich. 1602 (State Papers^ Domestic, Elizabeth, cclxxxv. 21) gives an average of
only £232_,952, but the assigned branches and some others are either omitted or
understated.

2 Thus it was said that Elizabeth towards the end of her reign sold many of her
jewels.

3 Murdin, State Papers, p. 737.

* State Papers J Domestic, Elizabeth, cclxxxvii. 50, 53. According to the latter
document, there was only £17,000 in the Exchequer.

^ There is an interesting instance of Elizabeth's economy in Statement D (ii),
p. 517. There was a saving at the rate of £793 per annum on the Privy Purse and
Wardrobe which was credited to the Revenue. Though the sum was small, it re-
presents 7 per cent, of the whole amount allowed for these branches of the Issues.

^ State Papers, Domestic, Elizabeth, cclxxviii. 54, 65 ; cf. Fragmenta Regalia, by
Sir Robert Naunton, 1642, p. 7.

Div. XV.] The Crown Debt 1603 509

impost, at a rate less than that obtainable from a solvent contractor,
either as a mark of favour or as a reward for services tended to reduce
the yield from this source.

In concluding this account of the finances of Elizabeth, attention
may be drawn to a form of statement which was common during the
early years of the reign of James I., and which, while apparently
conflicting with the results already arrived at, in reality confirms them.
It was often said that Elizabeth died in debt to the extent of ^400,000 ^
Such expressions while literally true, are most misleading; for, at the
death of Elizabeth there was .^300,000 of the subsidy of 1601 still to
be received^. What in effect happened was that this money had been
anticipated to meet war-expenditure, incurred ])y Elizabeth ; and the
simplest method of viewing the facts is to regard these payments of
the Parliamentary grants as " ear-marked ^^ for these expenses. It
follows then that the reported debt of <^400,000 may be justly
diminished by .£^300,000, leaving the real indebtedness ^^100,000 as
stated. Conversely, if the debt of Elizabeth be spoken of as ,^^400,000,
the outlay on her wars should be diminished by c£*300,000, since
James I. would receive that sum to pay such charges. There is neces-
sarily a certain injustice to the financial administration of Elizabeth in
recording both the cost of her wars and the amount of the debt at the
maximum.

1 Dorset's speech in Parliament in 1606 — Gardiner, Debates in 1610, p. 5 (note).
According to Salisbury's speech in 1610, debts of Elizabeth amounting to £300,000
had been paid, and there remained about £100,000 outstanding.

2 Ihid. , p. 5 ; Journals of the House of Commons, i. p. 395.

510

Crown and National Finance [div. xv.

pinancia:

A. Statements of the Crown Dei

Debt incurred up to the end of the reign of Edward VI.,

compiled about August 1553 (State Papers, Domestic,

Mary, i. 14)

Debt 1559 (State Papers, Domestic,
Elizabeth, viii. 28)

Ireland, due up to July 31, 1553 .

Berwick, due up to May 31, 1553, over
and above the wages of Duke of
Westmoreland, the Controller, the
Treasurer and other wages

Calais, due up to April 13, 1553, over
and above £16,000

Channel Isles, due up to May 30, 1553,
over and above £121. 18s. 5^d. .

Scilly Isles, due up to April 1, 1553

Admiralty, due up to Lady Day, 1553,
over and above several sums reserved
as by pay-book ....

Ordnance, due up to Michaelmas, 1553

Works,

Household

Chamber, due up to June 30, 1553

Due abroad according to the account of
Gresham

£ s. d.

36,094 18 5

16,639 18 7

I 21,184 10 2h
I 1,028 13 0

371 5 10

3,923 4 5

3,134 7 10

3,200 0 0

22,025 10 11 i

17,968 0 10

61,064 0 0

186,634 10 1

Ireland

Berwick (with £15,000 due
July 15, 1559) .

Admiralty .

Ordnance (Admiralty)

„ (Provisions)
Fortifications
Works ....
Lieutenant of the Tower
Wardrobe
Chamber

Household (former debt out
standing) .

Household .

Band of Gentlemen Pen
sioners

Guard ....

Master of Horse .

Armoury

Revels ....

Falconers

Privy Purse .

Due abroad November

£ s. d.

8,000 0 0'

,000 0 0

} 22,C

7,000 0 0,

281 19 8„

2,000 0 Oi

9,000 0 0

1,662 13 0

3,500 0 0

977 1 4

4,800 0 0

3,500 0 0

I 15,000 0 0

25,000 0 0

} 1,400 0 0

1,460 0 0

800 0 0

1,000 0 0

400 0 0

480 0 0

13,000 0 0

1 106,640 5 8

227,910 19 8'

1 In the MS. the total is given as £226,910. 19s. Sd.

DIV. XV.]

Crown Debts 1553-71

511

STATEMENTS 1553-1694.

FROM 1552 TO 1572.

Debt due at May 20, 1565 (State Papers,
Domestic, Elizabeth, xxxvi. 54)

Loans outstanding under the management of

Gresham, Nov. 30, 1571 (State Papers,

Domestic, Elizabeth, lxxxvi. 56)

Ireland. . . .

£ s. d.
20,000 0 0

Due in London.
To Sir Wm. Garrard

£ «. d.
1,953 10 0

Berwick . . .

15,000 0 0

„ Alderman Bamseye .

1,953 10 0

Admiralty . . .

3,000 0 0

„ Sir Roger Marten

1,953 10 0

Ordnance .

9,000 0 0

„ William Bond .

1,953 10 0

Works . . .

Household (former t
standing) .

lebt

out-

1,200 0 0
1 5,000 0 0

„ N. Fonteyn and P. de
Busgnell .

„ Sir Thomas Reigge .

} 1,953 10 0
1,953 10 0

Wardi-obe .

5,000 0 0

„ Sir Rowland Howard.

1,953 10 0

Armoury-

500 0 0

„ Alderman Ryner

1,953 10 0

Revels .

444 0 0

„ Wm. AUyun

1,953 10 0

Other debts on offices

2,000 0 0

„ Alderman Daniel Duckett

2,603 0 0

Due abroad per Gi-esham

. 17,000 0 0

„ Benedict Spinola

2,732 0 0

Other loans due .

7,000 0 0

„ Jas. Harvie .

„ John Paxton

„ Alderman Bamham .

„ V. de la Fonteyn

Total due per Gresham in Londo

Due in Antwerp.

£s Flem.
To Welser and Co. 14,327 10

1.694 0 0

Sums anticipated towards the dis
charge of above debts-
Arrears of rents of land £4,00<

Sales of land . . . 4,00<

Due from the Pipe . . 4,00*

Due from Collectors of
First-fruits and Tenths 60

85,144 0 0

[)
0

1,432 0 0
1,482 0 0
1,215 0 0

n 28,689 10 0

Arrearsfromotheroffices 45,50

58,100 0 0

„ GerleanoRader-

maker . . 3,664 0

27,044 0 0

„ Blias Weisse . 1,526 13

„ Daniel Alberto

Schadd . . 13,386 16

„ Casper Engel-

bert . . 2,362 0

„ Charles Weisse 3,402 13

£s Flem. 88,618 13

Which converted into Sterling

Total due in England an
Antwerp ....

30,894 18 8

^^ 1 59.584 8 8

512

Crown and National Finance [div. xv.

STATEMENT B. (i)— Estimated Ordinary RECEiFrs (Gross and Nei
AND Estimated Ordinary and Extraordinary Expenditure. (Lans
MS. 4, No. 55*, fF. 189-91.)

KECEIPTS.

1 560-1

1 561 -2

1 562-3

Gross

Expenses and
Deductions

Nett

£ s.

£ s. d.

£ s.

£ s. d.

Revenues of land .
Arrears— rev. of land

69,460 13
12,000 0

} 19,000 0 0

62,460 13

Reversions of land .

6,000 0

5,000 0 0

1,000 0

Fines of leases (average) .

4,000 0

Sales of wood .

1,000 0

[Duchy of Cornwall]!

3,500 0

[Duchy of Lancaster]! .

14,000 0

[Wards and hveries]!

17,000 0

17,000 9

i- 246,282 9 :'>h

/■ 246,282 9 3

King's Bench fines .

5,000 0

Hanaper ....

3,084 0

Installed debts

6,000 0

5,000 0

Office of the Pipe .

109,843 4

6,283 11 2

103,559 13

Profits of the receipt

60 0

Tenths ....

20,983 13

9,365 11 0

11,618 2

First-fruits

26,335 15

11,3:?5 15 9^

15,000 0

Tower2 ....

30,000 0

327,267 7

50.984 17 Hi

276,282 9

EXPENDITUEE.

Household

40,000 0 0

Chamber .

9,000 0 0

Wardrobe.

5,000 0 0

Works .

1,200 0 0

Armoury .

500 0 0

Navy

12,000 0 0

West Marches

1,000 0 0

East and Middle Marches
President of the Marches

23,000 0 0
1,100 0 Q

-134,760 0 0

>■ 134,760 0 0

President of the North .

1,200 0 0

Ordnance ....

1,000 0 0

Holy Island, &c.

360 0 0

Amuassadors .

'•■5

2,000 0 0

Rewards ....

2,000 0 0

Pensions ....

4,400 0 0

Assignments! .

;

81,000 0 0

)

Total Ordinary Expendi-

ture ....

134,760 0 0

Navy ....

\ .^••'5,

6,500 0 0

Ordnance

xtra
rtina
tper
tur<

3,000 0 0

Arrears of salaries'*

12,180 0 0

Loans to be repaid

)^^^

107,705 4 8

97,069 2 0

59,945 12 0

Total Expenditure .

251,965 4 8

244,009 2 0

194,705 12 0

Div. XV.] Estimates 1560-3, Revenue 1562-5

513

STATEMENT B. (ii) — The Receifps of the Exchequer (as recorded)

ANNUALLY FROM MiCHAELMAS 1562 TO MiCHAELMAS 1565. (Laiisd.

MS. 156, fF. 167-72.)

1 562-3

1 563-4^

1 564-5

Receipts of the Crown

Fines of leases

Sale of woods

Tenths

First-fruits

B s. d.

130,347 6 5

8,417 5 8

810 12 4

12,564 9 4

6,423 12 10

£ s. d.
-211,701 4 11

227,420 2 8
12,110 15 8

£ .V. d.

125,028 15 9

5,221 2 3

565 15 3

12,309 12 4

4,308 13 4

Temporalities of Bishoprics while vacant .

Subsidies of pensioners

ReUefs

Mint

Fines for transporting merchandize ....

423 5 7
258 19 7
179 15 8
283 6 8

15 16 0
114 13 0
30 0 0

170 17 8

Total recorded Ordinary Revenue ....
Sale of lands

159,708 14 1
66,879 5 1

147,765 5 7

Total

Subsidy

216,587 19 2
60,967 10 8

45,303 15 5

Total

Loans

277.555 9 5
38,159 8 8

193,069 1 0
4,000 0 0

Total recorded Ordinary & Extraordinary Receipts

315,714 18 1

197,069 1 0

Total recorded Issues of the Exchequer
Add payment of arrears of salaries taken out of
balance in hand

299,784 13 7

186,129 14 2

239,530 18 4

1 These are noted separately at the end of the MS. as being in assignment. It appears that at the
date this estimate was drawn up the amounts of the assignments had not been settled (State Papers,
Domestic, Elizabeth, viii. 20, 21).

2 This entry may relate to the proceeds of the coinage of old and broken plate, which was ordered to
be made into coin on 5th October, 1560 {ibid., EUzabeth, xiv. 9, 12).

3 These arrears were to be taken out of the balance remaining. This practice of paying off debts in
this manner is one of which the details were not often preserved. Thus the balance brought in (or
"remains" as it was called) in the next series of accounts (B. (ii)) is frequently less than that brought
out from the account of the previous half-year.

* The first half-year— Mich. 1563 to East. 1564— is stated in a form similar to the other accounts, but
the remaining half-year (East, to Mich.) only records the total transactions of each teller. It may be
noted that the former half-year includes £14,968. 13*. 8d. from the sale of lands.

8, C III

514

Crown and National Finance [div. xv.

STATEMENT C. (i)— Gross and Nett Ordinary Revenue, 1571-2 a^
1575-6. (Lansd. MS. 14, fF. 7-13. Add. MS. 34,729, fF. 41-6.)

1671-2

1 575-6 I

Total
collected

Deductions

Nett

Total
collected

Deductions

Net!

. £ 8. d.

£ 8. d.

£ 8.

£ 8. d.

£ s. d.

( ^ ( Fee farms .

5,890 16 5i

6,004 1 4

•-5 Sheriffs' farms .

2,402 6 8

2,239 19 7i

•| i Small farms

2,330 11 7i
33 17 6J

2,453 16 8

$ Assarts
!D vuinage

33 17 6i

774 13 8

782 3 4

^ Fines Queen's
Bench, &c.

6,547 0 3

6,704 16 0

Fines for homage

345 13 6

387 6 6

Ward-money, Dover .

80 12 8

87 3 4i

(^Forfeitures on penal

statutes .

999 1 8

680 S 8

Felon's goods and

land seized

1,600 17 2

3,316 1 3i

Fines for leases .

3,755 11 llj

4,513 4 7i

Star Chamber fines .

168 13 4

236 6 8

Sheriffs' amercia-

■6,361 12 4|

•85,095 17

> 6,286 2 IJ

>^95.381

ments

350 11 8

228 6 8

Installed debts and

•2

recognizances .

1,647 8 2*

2,395 5 10

■s

Debts recovered

1,351 13 4

1,465 14 7J

Goods seized by

sheriffs .

704 7 0

62 6 3i

Fines for reliefs .
Fines by Barons of

the Exchequer
Goods sold .
Compositions on

bonds
Recovered for woods .
Customs and imposi-

34 9 3i

17 1 4

398 16 8
258 0 0

45 0 0
117 5 4

i tions

62,439 8 9i,

69,240 10 7

Revenue lately annexed to

the Exchequer .

103,534 1 11

26,637 13 lOJ

76,896 8

102,475 10 11

25,769 17 7i

76,70513 S-

/'Hana.per of the Chan-

.5 eery.

5,884 8 1

2,222 2 7

3,661 5

5,937 19 7J

2,268 15 1

3,669 4 6-

Cg Hanaper of the Ex-

c^-l chequer .

60 0

95 0 0

a> Butlerage .

=°tf First-fruits . .

396 4 10

277 13 4

118 11

396 4 10

277 13 4

118 11 6

8,218 5

10,117 910,

.Tenths

12,862 3

12,862 3 4l

[Court of "Wards

12,000 0

12,000 0 0

Duchy of Lancaster]!

11,000 0

11,000 0 0

Tot»ls2 ....

35,499 2 2i

209,912 10 10

34,602 8 If

221,949 8 4i

1 ASSIGNMENTS.

From Court of
Wards

From Duchy of
Tiancaster

Wardrobe ....
Chamber ....
Household.

£ 8. d.

2,000 0 0

10,000 0 0

£ s. d.

4,000 0 0
7,000 0 0

12,000 0 0

11,000 0 0

Div. XV.] Revenue mid Expenditure 1571-2, 1575-6 515

STATEMENT C. (ii)— Ordinary Expenditure, 1571-2 and 1575-6.
(Lansd. MS. 14, ff. 7-13. Add. MS. 34,729, fF. 41-6.)

1671-2

The Privy Purse

Wardrobe (£6,000, with £2,000 1 from Court of Wards in 1572-3) .

Fees and rewards to customers

Fees and rewards to sheriff's

Ambassador in France

Fees to the officers of the Exchequer and Receipt

Expenses of diets in the Star Chamber

Rewards to grooms of the chamber

Warden of the East and Middle Marches

Fees and wages— Admiralty

„ „ Heralds

„ „ Ordnance

,, „ Armoury

Pees to Masters of Rolls, Judges, Counsel

Fees to diverse others

Fees and wages for garrisons

Charges — churches and colleges

Annuities

Chamber and posts (£7,000, with £4,(X)0' from Duchy of Lancast* r,

1572-3)

Household (£23,027. l^s. 2ld., with £10,0001 from Court of Wards and

£7,000 from Duchy of Lancaster, 1572-3)

Berwick

Gentlemen pensioners

Jewel house

Admiralty (for keeping and repairing ships m harbour))
Victualling of Navy (of the said ships) ( ' * '

Ordnance . .

Armoury

Tower (with £510. Is. 2d. for diets of prisoners)

Works

Revels and tents

Ireland

Livery of the Guard

Diet of Queen of Scots

1 575 6

£
2,000
8,000
1,314

660
1,216
1,589

225

100

424
1,435

<M3
1,404

693
1,975
4,090
1,198

3(!8
11,172

0 0

8 4
0 0

13 4

0 0

15 8^

0 0

1 8
10 6

9 2
8 9
4 10

13 2

0 0

13 4

11,000 0 0

40,027 13 2i

15,000 0 0

4,772 15 7

3,000 0 0

7,695 6 2

6,000 0 0

400 0 0

1,102 17 2

3,000 0 0

886 13 4

£ s. d.

2,000 0 0

6,015 11 0^

893 10 0

643 10 0

1,206 13 4

y 27,252 1 10

7,500 0 0

131,376 4 3

40,027 13

15,000
4,043
3,974
5,714

1,981

6,000

400

592

2,200

20,000 0 0

725 12 0

2,704 0 0

148,873 9 8

a In these MSS. the totals of revenue and expenditure are given without the assignments, though
these are taken note of in the expenses of the offices affected. For purposes of comparison these
assignments have been included on both sides. There are some errors in the addition in the MSS.
The totals there given are as follows:—

The Revenues

Deductions

Remaineth due

1571-2 .
1575-6 .

£ s. d.

222,185 4 Ok

233,855 9 10

£ s. d.
35,499 2 3i

34,602 8 2i

£ s. d.
186,686 1 9i

199,253 1 71

33—2

516

Crown and National Finanx^e [div. xv.

STATEMENT D. (i) — Statement of the Revenue and Expenditure
THE Year Mich. 1588 to Mich. 1589, compiled in the Year 1610
(Lansd. MS. 165, ff. 139-46.)

REVENUE

EXPENDITURE

Paid out of the
Exchequer

Rents and revenues in the Pipe
Rents and revenues before

Auditors of the Exchequer
Duchy of Lancaster in assign^

ment ....
Court of Wards in assignment
Customs and impositions .
Ulnage ....
First-fruits ....
Tenths ....
Hanaper and alienation .
Hanaper of the Exchequer
New Year's gifts
Recusants' lands
Temporalities
Lands of outlaws
Dover Castle and Harbour
Court fines ....
Fines of leases .
Installed debts .
Goods forfeited .

Total Ordinary Receipts

Benevolence

Total, exclusive of loan
Loan

Total

£ 8. d.
15,654 0 1h

109,032 15 6

11,000

12,000

101,698

716

2,500

11,592

6,418

17 4f
13
0

1,000 0 0

8,345 12 0

1,631 19 4

183 18 6

959
2,151
9,176

1 5
11 10.
14 11
13 10

294,819 12 3i
88,:362 10 10
4,878 3 8^
4.410 12 0

392,470 18 9|
28,107 0 0

420,577 18 9|

* In adding up the details of salaries, fees,
and annuities, the total of these is overstated
by £10, hence the whole Ordinary Expenditure
(including payments both by Collectors and at
the Exchequer) is given as £222,522. 16». 2^d.

Privy Purse

Wardrobe .

Household

Chamber .

Jewels

Master of Horse

Pensioners

Livery of the Guard

Works and gardens .

Posts and messengers

Diets (of Judges, of the Star
Chamber, of the Councils, of
the North and of Wales, of
Justices) ....

Salaries, fees, annuities ^ .

Rewards

Liberates

Alms to the poor

The Tower and diets of prisoners

Ambassadors ....

Admiralty (estimated) .

Victualling of the Navy (esti-
mated)

Ordnance

Armoury

Berwick and other fortifications

Ireland

Low Countries ....

Total Ordinary Expenditure
Navy and victualling
Expedition to Portugal .
Sir Francis Drake (service 1588)
Compensation to shipowners

(1588)

Ordnance and fortifications .
Low Countries ....
Willoughby's expedition.

Ireland

Allowance (education, son of

Lord Paget) ....

Interest

Jewel

Secret Service ....

Total— Ordinary and Extra-
ordinary ....

Paid by
Collectors

s. d.

756 11 11

213 7 4

574 16 0
16,473 4 2

295 16 7

18,086 8 5^

3,400 4 5J

36,400 4 5^

£ s. d.

1,000 0 0

8,708 18 lOJ

46,365 6 3

13,940 16 6

4,315 8 9|

100 0 0

4,175 11 4

717 17 6i

3,171 15 0|
1,100 0

5,092 16 11

25,135 6 5

1,433 8 7

928 9 8|

2,105 12 8

2,202 6 6

10.000 0 0

5,000 0

6,000 0

400 0

729 7

18,;389 9

25,100 0

186,112 11 8|

30,800 17 11

31,091 0 0

1,500 0 0

5,111 10 0

11,921 8 3

117,019 5 7

6,000 0 0

686 4 0

266 14 4

3,337 8 3

800 0 0

28,883 6 8

423,530 6 8J

Div. XV.] Revenue and Expenditure 1588-9, 1598-1603 517

rATEMENT D.

(ii) — RECEims AND Issues for One Year on the Annual

Average for

THE Five Years from 1598 to 1603. (Cotton MS.,

Titus B. IV. ff. 285b-293b.)

REVENUE

expenditure

Gross

Deductions

Nett

£ s. d.

& s. d.

£ *. d.

( S ( Fee farms

7,384 3 2

Treasurer of the

■^ Sheriffs' farms

3.947 5 4i

Chamber

14,000 0 0

•s \ Small farms .

1.812 17 10

Cofferer of the

■g Assarts .

33 17 6

Household .

46,727 4 2i

« vUinage .

990 4 6i

Privy Purse .

1,300 0 0

/'Fines on alienation

8.216 3 7

Wardrobe . .

9.845 19 11

-G

Fines on leases

1.833 9 6

Grentlemen pen-

•S

Star Chamber fines

4.318 15 0

sioners .

4,170 0 0

Other fines .

1,699 8 2i

Plate . . .

720 0 0

Forfeitures

1,501 4 6i

)■ 4,343 12 4J

50,416 14 8i

Revels .

66 8 8

Recusants

8,030 6 3

Office of Works

3,600 0 0

"3^

Lands seized .

7,154 7 2i

Admiralty

67.293 0 0

Temporalities .

2,149 10 11

Ordnance .

20,700 0 0

Concealed lands or

Armoury .

548 -0 0

woods .

660 0 Hi

Berwick .

17,300 0 0

Installed debts

4.862 5 '4

Captains for musters

5,8;^ 11 3

Ward-money, Dover

82 16 10

Posts . . .

3,450 0 0

Reliefs and reiiemp-

Justices of Assize .

1.640 0 0

l tions .

83 10 3i

Star Chamber .

1,350 0 0

' ^ Customs .

96,001 11 5i

Tower and diets of

^ a c Frenchand Rhenish

§5.2) wines .
"x-as 1 Sweet wines .

prisoners

2,781 0 0

15,000 0 0
7,880 4 lOi

• 5,680 16 5i

121,400 19 lOJ

Exchequer
Salaries, annuities.

2,931 0 0

5ia <^«ai. . . .

6,200 0 0

and pensions

35,000 0 0

Lead . . .

2,000 0 0

;

Tents and toils, mu-

Revenue lately annexed to

sicians, harriers .

—

Exchequer

Duchy of Lancaster

105,752 9 91

14,945 18 81

90.806 11 Oi

Jewel house .

2,756 0 0

17.309 7 4

2,847 19 11

14.461 7 5

Secretary of State .

1,200 0 0

County Palatine .

770 18 4J

489 17 5J

281 0 Hi

Ambassadors .

8.117 0 0

Duchy of Cornwall .

4.065 13 4

347 1 8i

3.718 11 U

Low Countries

27.450 0 0

Court of Wards

18,000 0 0
11.100 8 7

2,000 0 0
2,536 17 4

16.000 0 0
8,563 11 3

Ireland .

227,250 0 0

/ nanaper .

Mint
First-fruits .

1.580 0 0
6.151 2 3i

868 0 0
93 6 8

712 0 0
6,057 15 7i

Total

506,034 4 Oi

Tenths .
Butlera^e

12,500 0 0
471 11 8

12,500 0 0
193 18 4

277 13 4

Privy Purse and

Wardrobe .

793 18 0

^Dispensations.

181 16 lOf

21 13 4

160 3 6J

1 The total Revenue is given as
follows in the MS. : £485,212. 9«. l\d.

Total Ordinary Revenue
Subsidies and tenths .

360,519 9 71
125.000 0 0

326.066 13 4i
125.000 0 0

gross, deductions £34.4.52. 17*. 3jrf..
leavmg £450,759. lis. 9jd. nett.

Totali ....

485.519 9 71

34,452 17 3J

451,066 12 4i

518

Crown and National Finance [div. xv.

STATEMENT E. Receifis of the

Receivers General

Farms and Fee farms .

Sheriffs and Bailiffs .

Fines for Leases and on Alienation

Remembrancer of Treasurer

Exchequer Fees ....

Concealed Lands or Woods

Seizures

Dover Castle and Harbour

Faculties

Customs

Impositions on Sweet Wines .
„ „ French „

Hanaper

XJlnage

Exchange

Recusants

Fines in various Courts
Tenths of Clergy and Temporalities
First-fruits of Clei^y .
Installed Debts ....
Casualities

Total Ordinary Receipts .
Knighthood Compositions
Fines, Babington, Stonley ami others
Subsidies

Total, exclusive of Loans
Loans contracted

Total

1 580-1

£, s. d.

58,881 0 U

6,959 4 0|

7,887 8 1

4,856 7 3

368 4 5

153 6 8

38 15 11

133 14 9J

61,259 11 9

2,728 16 8

7,446 13 4

1,684 18 lU

1,001 13 6

3,660 11

20 0

11,838 10

5,500 0

8,594 13

779 19

186,243 11 1

1,000 0 0

579 4 8^

188,822 15 9^

188,822 15 9i

1581-2

£ s. d.

59,892 17 6i

7,752 13 Vh

7,486 7 1

3,906 17 3

376 2 4^

14 3 3

225 11 5h

68,820 8 10

2,864 8 4

4,000 0 0

37 4 7

653 15 0

1,000 0 0

20,903 16 • 8
1,500 0 0
8,245 10 6
1,394 5 4^

188,574 2 21

87,786 15 1

276,360 17 Si

276,360 17 3}

1 582-3

61,2S8 11 4^

8,435 9 8^

5,049 19 7

3,938 3 11

355 13 4^

152 1 0

1,337 6 6J

59,764

2,000

2,973

572 15 0

23,423 12 8J

1,900 0 0

6,806 16 7

710 9 7

178,695 14 2^

66,

245,103 17 11

Div. XV.] Receipts of the Exchequer 1680-90

519

ExcHEauER 1580-90. (Pells Declaration Books.)

1583-4

1 585-6

1 587-8

1 589-90

£ s. d.

£ s.

£ s. d.

£ 8. d.

59,893 1 9

57,896 3

57,612 18 3^

68,216 18 5

Receivers

7,113 15 10

6,808 15

7,188 4 2^

7,439 0 1h

Fee farms

7.867 19 lU

6,180 13

6,543 17 2h

11,435 4 4

Sheriffs

4,862 10 7

3,450 18

5,408 12 0^

4,128 18 6

Fines, Leases

649 0 4i

424 17

436 5 3

450 3 2i

Treasurer

36 15 0

64 13 4

Exchequer

28 16 4

361 0

2,910 7 11

76 18 4

Lands or Woods

299 0

370 18 10

207 19 4

Seizures

1,722 18 7

1,144 12

881 13 6

497 11 5
305 4 10^

Dover
Faculties

69,686 19 Qh

79,510 3

75,020 6 9

87,974 6 7

Customs

2,728 16 8

2,728 16

1,364 8 4

2,728 16 8

Wines, Sweet

5,973 6 8

4,881 6

3,000 0 0

9,979 10 2

French

37 4 7

37 4

37 4 7

Hanaper

697 3 6

400 0

656 19 8

969 2 0

Ulnage

1,000 0 0

Exchange

2,362 2 8

2.422 13

5,695 2 2

8,407 9 8J

Recusants

157 5 4

123 16

41 13 8

74 1 10

Court Fines

23,679 7 1

17,895 8

26,570 17 2i

26,557 1 3

Tenths (Clergy)

2,500 0 0

3,000 0

3,000 0 0

2,300 0 0

First-fruits

16,655 12 3

15,439 1

14,571 16 10

36,426 5 4i

Installed Debts

774 10 0

1,115 12

415 8 10

388 12 9

Casualities

208,390 11 8h

204,120 4

211,763 10 3k

268,665 3 3^

Total

Knighthood

Fines

10,807 16 6i

76,581 0

49,421 18 10

82,937 11 9

Subsidies

219,198 8 3

280,701 5

261,185 9 1^
6,600 0 0

351,602 15 0^

Total
Loans

219,198 8 3

280,701 5

267,785 9 U

351,602 15 0^

Total

520

Crown and National Finance [div. xv.

STATEMENT F. Receipts of the

Receivers General ...

Farms and Fee farms

Sheriffs and Bailiffs .

Fines for Leases and on Alienation

Remembrancer of Treasurer

Exchequer Fees ....

Concealed Lands or Woods

Seizures

Dover Castle and Harbour
Duchy of Lancaster .

Faculties

Customs

Impositions on Sweet Wines ,

„ „ French „

„ „ Grain .
License for Export of Grain

Hanaper

Ulnage

Exchange

Recusants

Fines in various Courts

Tenths of Clergy and Temporalities

First-fruits of Clergy

Installed Debts ....

Casualities

Total Ordinary Receipts .
Sale of Lands ....
Benevolence of the Clergy .
Fines, Babington, Stonley and others
Property of Fugitives
Subsidies

Total, exclusive of Loans .
Loans repaid by Low Countries
„ „ France .

Total

Loans Contracted

Total

1590-1

& s. d.

68,004 6 7^

7,396 13 11

14,088 15 0

6,874 13 11=}

541 2 Ok

872 6 0

25 0 0

1,251 18 1

88,041 2 y
2,864 8 4
5,773 13 5

37 4 7

645 2 6

6,413 0 9i

27,020 9 5^

3,500 0 0

27,114 6 2i-

437 1 11

260,401 5 7

97,151 5 10

357,552 11 5

1591-2

£ s. d.

67,862 7 5^

8,972 6 111

10,844 4 2

3,979 9 2

474 17 0

500 0 0

223 14 2i

580 0
953 7

87,533 19 9

2,728 16 8

6,587 11 9A

.3,425 0 0

37 4 7

981 3 10

5,908 11 3^

23,145 13
7,874 19
11,545 16 3
592 3

244,751 6 8^

?,788 10 7

313,539 17 3^

357,552 11 5

313,539 17 3J

1 592-3

£ s. d.

68,253 0 9

8,926 17 5h

13,806 3 7

3,758 2 11

443 13 5

305 9 0

.300 0 0

1,107 18 OA

100,678

2,728

5,955

303

2,928

576

600

5,996

200

21,878

8,462

16,804

19 2
16 8
16 8
14 0

1 6

4
18

7
0
0
5 11
8 6

3,937 1 5A

75,425 1 4^

339,362 2 10

),362 2 10

339,362 2 10

Div. XV.] Receipts of the Exchequer 1590-1601

521

Exchequer 1590-1601. (Pells Declaration Books.)

1 598-9

1 599-1 600

1600-1

£ s.

£ s. d.

67,442 0

58,980 15 1

56,261 10 2^
5,553 12 8*

Receivers

9,566 19

7,031 17 8

Fee farms

12,997 16

12,186 6 3

15.144 8 Hi

Sheriffs

6,823 5

4,674 5 6^

4,312 4 10

Pines, Leases

433 2

482 8 8

484 9 8

Treasurer

100 0

Exchequer

843 10

374 2 0

2,318 9 6

Lands or Woods
Seizures

303 6

769 10 1^
4,000 0 0

769 17 8

Dover
Lancaster

250 0

400 0 0

181 0 6

Faculties

69,944 5

65,185 10 8-i

131,127 16 8^

Customs

2,728 16

2,728 16 8

2,;i64 8 4

Wines, Sweet

7,952 3

4,050 12 C>h

17,940 13 8

French
Grain
„ License

987 16

1,717 13 0

4,703 0

4,568 13 10

1,672 7 5

Hanaper

466 17

472 11 0

551 2 0

Ulnage
Exchange

6,689 13

7,502 14 9^

4,756 15 9

Recusants
Court Fines

27,128 9

23,631 11 0

28,287 9 9J

Tenths (Clergy)

5,920 0

6,133 17 3

3,500 0 0

First-fruits

26,791 3

23,295 9 3

12,499 11 6^

Installed Debts

297 7

787 5 4

86 12 5

Casualities

252,369 15

228,974 0 8i

287.812 11 8

Total

202,350 11 3

39,459 14 8

Lands

963 1 10

Clergy

847 11

1,812 10 0

1,572 10 0
20,646 3 7

Fmes
Fugitives

100,705 0

150,140 17 10^

127,768 2 10

Subsidies

353,922 7

584,241 1 8

477,259 2 9

Total

1 27,000 0 0

2,894 0 0

Low Countries
France

353,922 7

611,241 1 8

480,153 2 9

Total

86,931 10

15,500 0 0

Loans

440,853 17

611,241 1 8

495,653 2 9

Total

522

Crown and National Finance [div. xv.

STATEMENT G. Issues of the

1 583-4

1 584 5

1 585-6

Privy Purse ....
Wardrobe ....
Cofferer of the Household .
Treasurer of the Chamber .
Jewels and Plate
Revels, Tents and Toils
Embroidery, Lace and Linen
Office of Works .
Posts and Stationery .
Pensioners ....
Livery of the Guard .
Fines remitted for Poor Relief
Diets of Judges .

„ Star Chamber
Salaries, Fees and Allowances for Service
Rewards for discovering Concealed Lands

and Rents

Tower and Prisons

Scots Queen's Diet

Scotland

Ireland

Berwick and the Border ....

Ambassadors

Treasurer of Admiralty and Bounty on

Ship Building

Victualling Navy

Ordnance

Armoury

Portsmouth

Dover

Other Fortifications, Castles^ Gardens .

Low Countries

Gifts and Allowances

Special and Secret Service.

Musters

Repayments and Sundries

Total Ordinary and Extraordinary
Issues, exclusive of Loans
Interest and Loans paid ....

Total .
Lands Purchased

Total

£ s. d.

600 0 0
3,416 17 5
2,121 15 10

0 0
2 10
4 4
9 4^

2 6
6 10^

3 4
8

2,400
3,585

353

4,602

1,580

6,032

631 10

53 6 8

1,584 18 7

635 3 2
1,838 18 10

118 9 7
2,252 15 2
1,800 0 0

61,309 18 8
2,140 8 8
2,223 5 10

7,394 3 1

2,354 6 U

11,093 10 10'

400 0 0

1,404 19 0

1,010 5 6

2,394 15 5^

2,100 0 0
5,753 14 Oi

182,274 7 8^
789 14 2

133,064 1 lOi
4,000 0 0

137,064 1 lOJ

£ 8. d

2,400 0 0

9,750 3 9

5,715 13 2

600 0 0

4,084 18 7

88 9

5,533 11

1,611 14

4,278 3

630 10

234 1

1,551 18

846 0

1,016 16

73 6 8

1,616 7 4

8,031 8 4

726 13 4

48,544 14 lOi

1,858 6 8

16,791 11 11

13
5,841 17
400 0
3,839 2
1,250 11
9,306 9

10,030 9 4
782 0 0
20 0 0

145,043 13 6i
6,000 0 0

151,043 18 6i

151,043 13 6J

£ s. d.

2,200 0 0

5,753 9 m
2,400 0 0
2,876 3 9

600 14 7
3,981 11 4
1,304 14 6
3,075 13 11

631 10 8

159 3 4
1.426 6 1

811 18 11^
2,634 9 8*

282 8 9
1,166 10 1

999 19 10

1,051 13 8

32,485 2 9

1,432 0 0

18.878 1
8,415 5
9,993 8

400 0

4,393 9

111 7

293 9

61.879 14
100 0

9,455 16 11
17,613 0 0

196,807 4 10
6,000 0 0

202,807 4 10

Div. XV.] Ismes of the Exchequer 1583-95

523

ExcHEauER 1583-95. (Entry Books of Issues.)

1 586-7

1 592-3

1 593-4

1594-5

£ s. d.

£ s.

2,500 0 0

1,000 0 0

2,000 0

Privy Purse

8,427 16 10

2,704 5 9

3,666 10 7

2,243 15

Wardrobe

5,962 16 0

7,995 1 6

7,918 19 8

5,904 11

Household

2,400 0 0

2,400 0

Chamber

3,603 7 10

2,212 19 3

2,038 7 8h

2,234 12

Jewels
Revels
Embroidery

88 9 4^

408 9 4^

3,316 1 11

3,773 4 4

4,318 3 6

4,998 12

Works

1,558 9 6

1,630 10 0

1,545 1 4

1,478 13

Posts

5,275 7 1

5,288 19 7

4,263 11 8

4,287 19

Pensioners

630 9 2

717 17 6

439 8 2

717 7

Guard

286 13 4

Fines

1,626 6 0

1,716 1 11

1,638 8 11

1,641 18

Judges

887 10 10

935 5 6

924 13 7

1,198 4

Star Chamber

2,695 17 11^

4,429 13 lA

3,949 1 5

5,267 15

Salaries

79 2 2i

Lands, &c.

2,027 10 2

1,824 1 8

887 4 7

1,766 2

Tower

3,500 0 0

Scots Queen

1,889 19 2

1,894 6 0

4,087 6 0

7,054 16

Scotland

38,493 17 1

13,418 6 8

25,920 7 3

36.588 1

Ireland

1,600 0 0

460 0 0

Berwick

2,126 10 0

721 10 0

1,949 14 8

5,016 2

Ambassadors

26,487 10 7

29,146 3 11

27,125 7 5

58,714 2

Admiralty

19,419 19 0

9,806 6 10

9,153 13 6

15,599 10

Navy

10,165 16 8

10,799 0 8

11,985 0 11

15,107 2 11

Ordnance

400 0 0

400 0

Armoury

2,476 8 0

2,391 18 0

1,744 0 10

3,182 5

Portsmouth

900 0 0

400 0 0

938 2

Dover

1,317 3 1

458 3 4

2,312 2 6

1,720 4

Other Forts

118,060 15 1

179,465 18 1

121,516 18 10

175,435 15

Low Countries

2,100 0 0

130 0 0

2,021 0 0

619 19

Gifts

13,260 0 0
147 0 0

3,615 8 7

5,590 18 2

3,823 12

Special Service
Musters

51 16 2

481 0 3

24 15 10

Sundries

282,810 16 lOi

289,826 18 4^

250,545 10 10

360,364 3

Total

24,937 10 0

Loans

307,748 6 m

289,826 18 4J
2,000 0 0

250,545 10 10

360,364 3

Total
Lands

307,748 6 lOi

291,826 18 4i

250,545 10 10

360,364 3

Total

524

Crown and National Finance [div. xv.

STATEMENT H. Issues of the Excheuuer 1595-1601.

Privy Purse

Wardrobe

Cofferer of Household ....
Treasurer of Chamber ....

Jewels and Plate

Revels, Tents and Toils ....

Office of Works

Posts and Stationery

Pensioners

Livery of the Guard

Fines remitted for Poor Relief .

Diets of Judges

„ Star Chamber ....
Salaries, Fees and Allowances for Service

Other Allowances

Tower and Prisons

Scotland

Ireland

Berwick and Border

Ambassadors

Treasurer Admiralty and Bounty on Ship

Building

Victualling Navy

Ordnance .......

Armoury

Portsmouth

Dover

Other Fortifications, Castles, Gardens .

Low Countries

Prance

Picardy

Gifts and Allowances
Special and Secret Service

Musters

Wheat

Repayments and Sundries

Total Ordinary and Extraordinary
Issues, exclusive of Loans
Interest and Loans paid ....

Total .
Loan to King of Franco

Total .

1 595-6

£ s. d.

693 12 1
6,894 13 10
6,257 4 2^
4,200 9 0
4,808 15 10

3,0i2 14 0

2,190 6 2

4,230 11 7
310 8 8
237 15 6

1,841 19 4
754 19 2i

1,337 4 4

2,825 3

1,430 4

3,150 0
71,810 5

1,530 1

3,264 14

113,253 4 1
6,878 13 11

18,631 12 10
1,810 15 2
3,407 7 0
1,193 9 7
2,831 16 6

65,162 18 5

445 1 0

119 0 0

7,000 0 0

16,162 13 0

1,500 0 0

359,210 13 9A

859,210 13 9i
6,000 0 0

365,210 13 9J

1 596-7

1 697-8

£ s. d.
2,000 0 0
5,872 5 5

11,556 0 0
3,458 1 11

3,461 15 8

2,333 17 11

3,131 9 10

398 18 0

1,641 6 0

1,219 2 0

2,135 8 6

2,232 10 0

1,514 2 7

3,000 0 0

49,661 18 5

4,623 17 3

4,396 9 y

57,773 17 6

33,072 2 0^

25,940 1 2^

2,400 3 0

1,402 19 2

5,461 8
58,186 12
12,681 13

,371 13 5^
,040 0 0

8. d.

27,139 17 8

2,208 5 11

6,375 12

2,401 4

2,031 18

719 18

130 0

846 17

1,765 16 11

23,615 1 5

916 13 1

102,599 11 5

3,375

308,333 18 11^

308,333 18 llj

308,333 18 \lh

84,297 7 3

49,135 0 4^

20,395 6 5

200 0 0

399 12 10

452 5 11

6,728 10 2^

78,318 18

15,112 4

12,510 12

2,480 15

26,506 6

5,922 7

476,653 12 ^

476,653 12 3.J

476,653 12 3^

Div. XV.] Issues of the Exchequer 1595-1601

525

(Entry Books of Issues and Pells Declaration Books.)

1 598 9

1 599-1 600

1 600 1

S. s. d.

£ s. d.

Privy Purse

21,785 15 8^

34,810 18 9i

29,669 12 6

Wardrobe
Household
Chamber

4,021 13 5h

Jewels

132 13 4

Revels

3,772 12 4

8,920 4 3

10,081 11 7

Works

2,117 5 0

2,127 15 0

3,720 15 8

Posts

Pensioners
Guard
Poor Relief

2,659 12 5

Judges

4,089 17 8

5,511 12 4

4,186 11 11

Star Chamber

27,905 2 7i

51,203 7 7h

16,949 5 5|

Salaries

Other Allowances

Tower

Scotland

99,500 17 11

275,930 13 5^

292,077 5 lOi

Ireland

7,000 0 0

5,137 0 0

4,000 0 0

Berwick

8,810 17 8

6,686 13 10

9,892 11 7

Ambassadors

25,064 6 6

97,249 15 4

59,242 11 4^

Admiralty

21,926 13 in

Navy

9.500 0 0
100 0 0

} 23,686 7 7i

16,459 11 4

Ordnance
Armoury
Portsmouth
Dover

6,000 0 3

8,131 4 9

4,665 10 U

Other Forts

39,697 19 2

27,322 2 6

26,896 7 8

Low Countries

France

Picardy

221 0 0

Gifts

Special and Secret Service

Musters

Wheat

1,267 13 8^

Repayments, &c.

281,646 15 7

546,717 15 5|

481,769 1 2|

Total

2,561 18 0

Loan

281,646 15 7

546,717 15 5 J

484,330 19 2|

Total
Loan

281,646 15 7

546,717 15 5f

484,330 19 2J

Total

526

Crown and National Finance

[div.

STATEMENT I. (i) — Statement showing the Amounts realized »
Parliamentary Grants of Tenths and Fifteenths from 1523 to 16(
(State Papers, Domestic, Elizabeth, xl. 85 ; ccxliv. 51 ; James
XXXVII. 38.)

Year of

Clergy

Laity

Parlia-

~ J

ment

Rate

When payable

Rate

When payable

1528

154,745

l.-l

1541

^ ,

95,000

1553

147,109

1555

145,900
146,000

Tentl
withoi

1558

s. d.

1559

A-

2 8

1 8

April 30, 1559

1 4

1 0

January 20, 1560

VDlM

1562-3

^TS i October 2, 1563, 1564, 1565

A-

2 8
1 4

1 8
1 0

April 30, 1563
December 10, 1563

207,722

1566

„ „ 1567, 1568, 1569

A-

1 4
1 4

1 0
0 10

February 10, 1567
„ 1568

109,000

1571

■h

„ „ 1571, 1572, 1573

A-

2 8
1 4

1 8
1 0

September 20, 1571
„ 1572

175,690

1675-6

, „ 1576, 1577, 1578

A-

2 8
1 4

1 8
1 0

June 12, 1576
September 20, 1577

169,162

1580-1

„ „ 1581, 1582, 1583

A-

2 8
1 4

1 8
1 0

May 12, 1581
September 20, 1582

167,876

1584-5

. „ 1585, 1586, 1587

2 8
1 4

1 8
1 0

June 10, 1585
September 20, 1586

163,546

1586-7

„ 1588, 1689, 1590

2 8
1 4

1 8
1 0

October I, 1587
>, 1588

163,130

1588-9

„ 1591, 1592, 1593

2 8
1 4

1 8
1 0

„ 1589
« 1590

160,545

„ 1594, 1595, 1596

TV>

iS •

2 8
1 4

1 8
1 0

., „ 1591
„ » 1592

155,481

816,026

4 0

2 8

„ „ 1593

152,790

1592-3

■ February 19, 1594, 1595, 1596

A-

4 0
2 8
1 4

2 8
1 8
1 0

„ „ 1594
„ 1595
„ 1596

148,645
} 144,655

446,090

4 0

2 8

„ „ 1598

140,904

1597

„ „ 1598, 1699, 1600

4 0

2 8

,. „ 1599

140,688

4 0

2 8

„ „ 1600

132,260

413,852

[(is.) March 26, 1602

4 0

2 8

December 31, 1601

134,471

/■ao n /October 2, 1602
(^•> i March 26, 1603

2 8

1 8

March 31, 1602

1 134.132

1 4

1 0

October 31, 1602

1601

- /.„ ^ /October 2, 1603
^**-> tMarch 26, 1604

Y 5- •

2 8

1 8

March 31, 1603

1 128,588

1 4

1 0

October 31, 1603

fA.« \ /October 2, 1604
\K*s.) -[March 26, 1605

2 8

1 8

March 31, 1604

1 125,091

1 4

1 0

October 31. 1604

Total Tenths and Fifteenths of

522,282

Laity

3,045,376

The data for determining the amount realized by the subsidies of the clergy are less exact than in the case
of those of the laity. The proceeds of each, xVth of the grant of the former of 1562-8 are estimated at £14,000
"clere" (State Papers, Domestic, Elizabeth, XL. 85), while in 1601 a similar rate yielded only £10,000 (D'Ewes,
Journals, p. 630). It is highly probable that it was on the latter basis that the sum, assigned to these payments
on the next page, was arrived at— i.e. forty-four ^js^hs at £10,000 each =£440,000. But this calculation leaves
out of account the higher revenue from this source per tenth earlier in the reign. Possibly £14,000 per jV^'^ '^^^
an estimate not realized in practice, and, allowing for the tendency of the yield to fall, it may be estimated that
the average amount obtained per xV^h. up to and including the grant of 1575-6, was £12,000, thereafter till that
of 1586-7 (and including it) £11,000, and during the remainder of the reign £10,000. This would give a total of
£m,000.

Div. XV.] Subsidies and War-expenditure 1523-1604 527

STATEMENT I. (ii)— The Charges of all the Wars in the Reign of
Elizabeth. (State Papers, Domestic, Elizabeth, cclxxxvii. 59, 60.)

Date

1559

1562

1569

To 1573

„ 1579

1585-7

1587-90

1588

1590-7

1597

1597-1603

1591-3

From 1593

Description

Scotland

Newhaven Expedition

Rebellion of Norfolk * '

„ O'Neil in Ireland '. . . .

„ Desmond in Ireland ! . "

Low Countries, from Aug. 2, 1585, to Feb. 1. 1587 (R. Huddlestone, treasurer)
mu A " . ^^^"^ ^^^- 2' 1^^^' *o ^^^- 1^' 1590 (Sir T. Sherley, treasurer) .

The Armada £137,829

23,356

(camp at Tilbury)

Contributed by the Crown to Voyages by Adventurers-
Portugal Voyage (1589) ieei.OlQ

Cadiz Voyage (1596) (State Papers, Domestic, Elizabeth , CCLXV. 68) 51,633

Amount

Islands Voyage (1597)

Low Countries, from Oct. 16, 1590, to March 31, 1597 (Sir T. Sherley, treasurer)
„ from March 31, 1597, to May 9, 1597 (Sir T. Flood* treasurer)

from May 9, 1597, to 1603 (Sir W. Meredith, treasurer) .

France, from Aug. 2, 1591, to Nov. 16, 1593 (Sir T. Sherley, treasurer) .

„ from Nov. 16, 1593 (Sir T. Flood, treasurer)

Army in Brittany, to February 16, 1594 (Sir T. Sherley, treasurer)
„ Army in Picardy, to April 10, 1597 (Sir T. Sherley, treasurer) .
„ to May 9, 1597 (Sir T. FJood, treasurer)

from May 9, 1597 (Brassy and Smith, treasurers)

Ireland

These expenses were met as follows—

Eighteen subsidies of Clei^y £ 440,000

Twenty subsidies and thirty-nine fifteenths of Laity . 3,079,464
Sales of land 817,359

Total

£4,336,823

154,620
509,230

161,185

112,652
69,607

438,570

3,326

313,851

57,928

6,000

284,420

12,787
4,345

12,000

178,820
246,380
92,932
230,440
254,961

825.035

182,260

755,746

377,480
1,924,000

5,068,054

Details as to the grants of the laity are clearer. Beginning with 1571, the sums obtained ft-om each of them
are recorded (State Papers, Domestic, James I., xxxvii. .38), while a note compiled by Burghley gives the amounts
realized by subsidies from 1523 to 1589 (State Papers, Domestic, Elizabeth, ccxliv. 51). This document does not
include ^^ths, but these are given for 1562-3 (State Papers, Domestic, Elizabeth, xL. 85) at £29,000 per xV*^, and
when the required number of xV*'^^* i^ added to Burghley's figures at this rate they agree with State Papers,
Domestic, James I., xxxvii. 38. Accordingly, while the figure given by Burghley for the grant of 1559 is £133,000
( = x%ths of the laity), £58,000 ( = x^s^hs) has been added above, and similarly. £29,000 ( = xV*^) 'o that of 1566.

Taking the grants of clergy and laity together, the results come very close to those recorded above, i.e.—

Grants of Clergy . . £ 471,000 (Statement I. (i)) £ 440,000 (Statement I. (ii))
Grants of Laity . . 3,045,376 „ „ 3,079,464

Total

. £3,516,376

£3,519,464

There are several errors in the addition in these documents. The total of "Voyages by Adventurers" is
given as £172,260, while that of the subsidies and sale of lands is placed at £4,326,923. The chaise under
"France" is written £297,480, but there can be little doubt that (allowing for repayments) the larger sum is
more correct, since in 1596 this outlay was returned at between £314,149 and £364,312, and in 1598 at £.'J81,867
(State Papers, Domestic, Elizabeth, CCLVII. 76, 105 ; CCLIX. 113; CCLXVI. 12). The disbursements by Sherley for the
Low Countries are recorded in the MSS. as otie sum of £947,800. The portion assigned to the period 1587-90 is
determined by a note made by Burghley {ibid., CCLII. 5). Another account, coveruig the same interval, gives
£505,369 {ibid., CCLII. 111). In a statement made in Parliament in 1593, the outlay on the Low Countries is taken
at £846,120 from 1585, and the whole extraordinary charges for war, from the same date (this included) at
£1,218,800 (Cobbett, Parliamentary Hist, of England, l. 870; Pari. Hist., iv. 364). The form in which the
subsidies of the laity is expressed tends towards over-statement. A " subsidy " frequently meant ^lyths, thus
" twenty subsidies" would be equal to fgths instead of f^ths. The excess of the subsidies of the laity in I. (ii)
over I. (i) is almost exactly the later produce of ^th.

528

Crown and National Finance [div. xv.

STATEMENT J. Analyses of the Crown Finances for 1641 and

THE CONSEQUENCES ANTICIPATED FROM THE BiLL OF ToNNAGE AND
AND THE ESTIMATED ORDINARY EXPENDITURE FOR 1642, DATED

I . Reventie expected to fail totally.

III. Revenue expected to continue.

Impost on Tobacco
Retailing Tobacco
40«. per tun on Wines per A bell
Soapmakers of London .
„ „ Bristol .
Castle Soap
Grant of 12d. on Sea-coals per

Sandes ....
Pretermitted Customs .
Copperas Farm
Patent for glass
Star Chamber Pines
Corporation of Westminster
Patent for Playing Cards and

Dice ....
Beaver Hats .
Clerk of the Market
Unwrought cloth .
Sundry Small Farms
Silk, Starchmakers, Gold

thread and Gunpowder

11,000
13,052
30,000
29,128
1,200
500

10,000
17,863
1,050
1,500
1,912
1,100

741
500
336
100
973

120,955

II. Revenue affected by the Bill
of Tonnage and Poundage.

Great Customs
Petty Customs
New Impositions .
Impost on Sea-Coal
Composition for Wines

Out-ports .
French Wines .
Impost on Wines .
Other Imposts
Cottons and Bays .
Sugar

172,500
72,500
119,583

5,000

346

30,092

5,004

200

2,000

Alum Works
Purveyance .
Post Fines .
Wine Licenses .
Greenwax .
Old and New Draperies
Issues of Jurors .
Percentage on export of

bullion
Ballast of Ships .
Chief Butlerage .
Sundry Small Farms .
Court of Wards .
Duchy of Cornwall .
„ Lancaster .
Receivers General
Hanaper
Alienations .
First-fruits .
Tenths.

Mint ....
The Pipe .
Recusants in the North
South
New Year Gifts .
Faculties

Respite of Homage
Dover Castle— Rent
Reliefs .
Installed Debts and Seizures
Uncustomed Goods .
Fines and Amercements

Receipts

12,500
36,237
2,275
2,700
3,265
997
1,000

5,760

466

500

413

75,088

19,435

10,522

83,964

7,695

5,986

5,646

12,598

13,270

9,093

14,222

4,424

2,178

;J39

837

100

334,480

Assign-
ments and
anticipa-
tions

12,160

36,237

1,300

2,633

300

746

150

278

75,088
16,541
10,438
69,940
7,005
3,920

11,729

7,325

7,158

184

2,178

837

267,454

Balance

remaining

£
340

975

2,965

251
1,000

5,610

413

84
14,024
690
2,066
5,053
12,598
1,541
1,768
7,064
4,240

318

100

67,026

Div. XV.] Estimates of the Revenue in 1642

529

1642 ; showing the effect thereon of the recall of the monopolies,
Poundage, the remaining revenue, the amount of the anticipations
December 28th, 1641. (Egerton MS. 2541, fF. 266-70.)

IV.

Charges {Ordinary) for 1642
unprovided for.

Privy Purse

The Queen

5.000

3,800

23,400

19,150

51,250

5,000

13,065

2,250

2,114

16,981

6,000

4,756

1,546

11,654

6,000

9,247

400

1,400

2,719

2,015

2,691

2,200

2,458

1,865

975

890

1,112

633

87,437

21,685

20,200

22,473

Revenue
1641

Revenue
1642

ThePnnces

The Queen of Bohemia and her

children

Household

Robes

Wardrobe.

Table I

„ II

„ III

Total

Less anticipations

Balance being certain available
revenue to meet charges of the
year 1642

Ordinary charge 1642, Table IV.

Deficiency ....

To which must be added the Pen-
sion of the Queen of Bohemia,
Wardrobe arrears. Gunpowder
and Posts (which are not esti-
mated for under the Ordinary
Charge) as well as the whole of
the Extraordinary Charge.

£
120,955
407,225
334,480

nil

doubtful

334,480

Tapestry works at Mortlake .

Master of the Horse

Chamber

862,660

334,4S0
267,454

Gentlemen Pensioners .

Jewels

Livery and halberts of the Guard .

Works

Ordnance

Forts and Fortifications .

Armoury

Secret Service

Diets

Tower and Prisons ....

Revels, tents

Keepers of Parks, Lodges, &c.
Repair of Castles ....

Liberates

Rewards

Messengers

67,026
352,366

285,340

Creation Money ....

Perpetuities

Annuities and Pensions .
Salaries and Fees ....

Ambassadors

Interest

Total

352,366

S. C. IlL

530

Crown ami National Finance

[div. x^

STATEMENT K. (i)— Estimates of the Revenue 1668-81.

16G81

1672 2

1G78'

1079^

16815 j

* \

Customs

400,000

600,000

500,0008

Excise

340,000

475,000

400,000

480,000 «

Hearth Money

170,000

180,000

135,000

162,000

170,000

Law Duty

40.000

26,500

20,000

First-fruits and Tenths ....

16,000

14,000

16,000

} 40,000 1

Small branches

120,000

20,0007

20,000

15,000

Payments re-assigned to the Crown .

421,000

Wine License

8,000

1,080,000

1,702,000

1,270,500

1,221,000

1,190,000

and

1 Egerton MS. 2543, f. 209; Harl. MS. 6836, f. 69.

2 Add. MS. 28,078, f. 47.

3 Ibid., f. 73.

* Ibid., f. 325.
» Stowe MS. 323, f. 40.

* In these cases the sums estimated are expressly stated after the deduction of salaries
management.

7 The sum for small branches is over and above assignments on these revenues for certain pensions.

8 Add. MS. 28,078, f. 206.

9 Ibid., f. 313.

i** In addition to the payments from the Exchequer on account of the Navy, further sums were
provided from the subsidy to Charles II. from France.

" The salaries of the Judges include a pension to Prince Rupert, which was £6,000 in 1678.

'2 In the MS. for 1673 this amount is stated at £37,000, apparently by error, since the total given
would only be correct if the sum were the same as in the previous year.

DIV. XV.]

Estimates 1668-81

531

STATEMENT K. (ii)— Issues of the Exchequer.

STavy

Vrray

Tangier ....

Jrdnance

Privy Purse New Year's Gifts
Jueen Mother ....
Jueen Consort ....
Duke of York ....
Pensions and Bounties .
Household and Stables .
Ireasurer of the Chamber
3reat "Wardrobe

Bobes

lewels

Tents, Toils and Revels .
Falconry, Harriers, Gamekeepers ,
Buildings and Repairs .
3-entlemen Pensioners .
Embassadors and Agents
Judges and Masters of Chancery"
Secretary of State ...
„ Intelligence
Secret Service ....
Council of Plantations
Tower and Coinage money
Privy Seals, Lib. Exclieq. and Crea

tion money ....
Healing gold ....

Redemption of Captives .

Repayments ....
Management Customs

„ Excise

„ Hearth Money .

Post Office and Postages
Casualities ....
Interest

Estimates

200,000
182,000
55,500
30,000
12,000
40,000
23,000

92,500

20,000

16,000

5,000

2,000

500

1,808

8,000

3,000

30,000

14,500

4,000

4,900
1.200

-100,000

150,000

996,676

16722

800,000
259,000

55,500
120,000

38,000

12,000
24,000
60,350
100,000
30,000
24,000
5,000

8,000
6,000
30,000
40,000
3,700^-
4,000

6,500

55,000
20,000
1,000

1,702,050

16733

1,350,000
500,000
60,000

50,000

11,900

24,000

100,000

110,000

30,000

7,000

12,000
6,000
30,000
80,000
3,700
4,000

6,500

55,000
12,000

2,433,900

1681"

£
300,000
190,000

40,000
15,000

|- 36,000

20,000
10,000
8,000
4,000
22,000

20,000

49,000

5,000
20,000

2,000

4,000
10,000
120,000

878,000

Actual

From June 20.

1673 to June 25,

16758

Prom Easter 1673
to March 25,

16789

£ s. d.

1,255,690 2 5"'

581,871 17 OJ

93,003 17 10 I

159,204 2 3 !

76,625 7 9 ;

76,000 0 0

387,233 9 7i

265,656 19 11

67,837 13 0

89,008 10 11

15,740 7 5

20,775 11 0

3,407 1 4

35,645 4 7

13,114 16 5

104,123 15 2

141,000 0 0

124,282 13 8

23,097

3,185 15 OJ

3,200 0 0

17,125 0 0

53,539 15 U

'28,732 14 8^

9,350 6 2
116,920 15 4J

3,715,732 18 2,\

£ s d.

3,432,602 14 0

•2,114,294 10 2i

642,692 14 3

826,777 7 2

230,409 0 11

137,927 16 0

30,740 7 5

54,228 9 6i

10,840 6 8

87,433 6 3^

37,956 0 6

301,110 7 3

69,724 16 10

8,276.767 17 Oj

34—5

532

Crown and National Finance [div. xv.

STATEMENT L. Receipts of the Exchequer

27 March 1679—

Lady Day 1680-
Lady Day 1681

Lady Day 1681—

Lady Day 1680

Lady Day 1682

£ *. d.

£ s. d.

Customs

691,905 9 2

598,977 8 11

666,548 16 If

Excise

902,498 11 1

623,195 13 6i

608,199 0 3i

Hearth Money

16,437 15 11

34,322 10 0

78,342 9 6

Imposition on French Linen, Silks and

Brandies

New Imposition on Wines and Vinegar ,

„ „ Tobacco and Sugar .

Letter Office

First-fruits and Tenths ....

12,237 5 6^

12,368 3 5

11,463 14 5

Total of Customs, Excise, Hearth

Money, Post Office, First-fruits

and Tenths

1,623,079 1 8^

1,268,863 15 lOi

1,364,554 0 4i

Goods seized. Seizures ....

3,511 17 U

5,974 12 7^

7,752 13 3

Fines of Leases

14 0 6

540 2 9

18 11 11

Coinage Money

6,174 13 0

10,616 5 9i

2,770 3 0

Duty on Coals

1,002 13 4

835 0 O"

1,002 0 0

Recusants, Forfeitures and Rents .

1,149 15 10

1,172 5 8

7,207 9 2

Proffers

1,490 11 5

1,611 9 Ih

Alienations

1,150 0 0

940 0 0

60 0 0

Land Revenue with Duchy of Cornwall .

553 16 8

2,116 2 5i

2,056 16 4

Rent of Lighthouses

20 0 0

33 6 8

20 0 0

Rent for Bombay

10 0 0

Compositions in Exchequer

21 1 8

53 14 10

115 2 11

Duty on Unwrought Wood

470 4 2

900 0 0

Wine Licenses

4,206 13 4

14,512 9 6

Do. Advance part of £15,911. 10.?. Ihd. .

Wood Sales '. .

309 6 8

1,000 0 0

King's Bench Fines

716 14 8

772 6 2

Salt Farm

200 0 0

Sheriffs of Counties

1,834 14 5|

Cities

85 17 lOJ

Rent for duty of 4^ per cent. .

3,478 10 0

Sale of Crown Lands and Forfeited Estates

500 0 0

39 2 8

Conventicle Fines

Rent of Carolina

Seizures of Leather

97 9 10

Custody of Idiots

5 0 0

10 0 0

Fine on Daniel Gate

Sale of Tin Farthings

Profits of Alienations per Tally

Ulnage of Cloth

Profits of the Hanaper per Tallies .

King's Bench Fine set on Rich. Young .

Woollen Cloth

1 0 0

1 10 0

1 0 0

Lands seized and I m post on Salt (Sundries)

0 13 4

Total, including Small Branches,!
carried for ivard to pp. 534, 535 /

1,638,653 15 5

1,298,701 13 9^

1,408,298 7 5i

Piv. XV.] Receipts of the Exchequer 1679-86

533

1679-86 (MSS., Bodleian Library, Eiig. Hist., b. 4-18).

Lady Day 1682-
Tiaily Day 1683

Lady Day 1683—
Lady Day 1684

Lady Day 1684—
Lady Day 16S5

Lady Day 1685-

Lady Day 1686

£ 8. d.

£ s. (f.

£ s. d.

650,452 4 3|

542,005 18 2

676,791 8 6i
594,237 6 4

595,214 8 74

Customs

521,492 11 34

459,907 8 10

608,440 5 6^

Excise

24,891 4 10

18,689 17 4

79,479 10 9

210,086 7 6

70,427 15 14
71,643 16 74
60,855 6 114

Hearth Money

French Linen, &c.
Wines and Vinegar

Tobacco and Sugar

74,035 13 10

Letter Office

10,531 17 6

7,430 13 0

10,002 4 94

18,330 15 8

First-fruits

1,207,367 17 lU
6,378 8 8i

1,028,033 17 4

1,360,510 10 5

1,709,034 9 lOf

Total (1)

4,340 2 4

4,432 15 4

5,839 2 5

Goods seized

128 10 2

167 10 2

13 14 4

449 6 10

Fines of Leases

637 11 3

3,890 2 04

Coinage

1,000 0 0

1,003 6 8

1,000 0 0

1,002 13 4

Coals

7,4«2 5 10

3,665 13 0

5,733 19 14

8,991 1 74

Recusants

615 8 lU

1,604 12 10

1,279 8 94

Proffers

350 0 0

810 0 0

Alienations

3,43;i 8 2

5,554 18 11

4,538 5 6i

3,S59 5 8

Land Revenue

20 0 0

40 0 0

26 13 4

6 13 4

Lighthouses

10 0 0

Bombay

66 10 9

226 7 10

76 17 2

74 7 8

Exchequer

1,125 0 0

900 0 8

900 0 0

Unwrought Wood

8,487 8 84

6,100 0 0

4,875 0 0

6,809 6 94

Wine Licenses

10,000 0 0

Do. £15,911. 10s. 74c?.

1,580 0 0

4,200 0 0

2,400 0 0

1,900 0 0

Wood Sales

329 11 3

3,103 5 2

2,297 19 11

1,541 2 2

King's Bench
Salt Farm

597 1 3

1,227 12 24

Sheriffs of Counties

55 7 04

174 3 10

Cities

4,678 10 8

4,047 14 94

1,203 3 24

3,478 10 8

44 per cent.

633 4 &l

8,098 0 0

146 16 8

Crown Lands, &c.

53 15 2

116 2 11

Conventicle Fines

66 13 4

40 0 0

47 12 84

93 6 8

Carolina
Leather

5 0 0

7 10 O"

100 0 0

8,567 18 9

1,000 0 0

4 10 0

37 4 7

1,200 0 0

Idiots

Daniel Gate
Tin Farthings
Profits per Tally
Ulnage Cloth
Hanaper per Tallies
Fine, Rich. Young

0 10 0

1 10 0

0 10 0

Woollen Cloth

10 0

2 0 0

0 13 4

Lands seized, &c.

1,254,752 13 8f

1,070,990 5 74

1,390,191 17 54

1,760,426 11 2|

Total (2)

534

Crown and National Finance

[div.

XV.

STATEMENT M. Receifi-s of the

Brought forward
Fee Farms and Manors
Imprest Money repaid
Droits of Admiralty ....

Queen's Portion

Money assigned to King's use .
Orders on Twelve Months' Assessment
Ships and Goods condemned .

King's Plate

Present of East India Co. .
For Old Artillery Ground .

Secret Service

Redemption of Captives .

Poll Order

Money paid pursuant to a decree in the

Exchequer

Part of a debt of £4,212. 13*. lOU. .
Money Forfeited for Treason .
Part of Sir Wm. Doyly's Debt .
Money paid, per Mr Shaw

„ Roger Whitby, Esq.
King's Dividend in East India Co. .

„ „ African Co.

Revenue of Ireland ....
Queen Dowager's Portion .
Conscience Money ....

Total, including "Casualities" .
Second 18 months' Assessment .

11 months' Assessment and Royal Aid

17 „ „ for 30 Ships.
Poll Money for War against French King
1st part, 1st Disbanding Act
2nd
Second Act for Disbanding

12 months' Tax .

„ „ repaid
Last Poll Money .
Two Last Wine Acts .

18 months' Tax .
Additional Aid .
Arrears of Voluntary Present

Total, exclusive of Loans
Loans

Total Receipts

27 March 1679—
Lady Day 1680

£ s. d.

1,638,653 15 5

1,206 14 2

4,642 11 0

550 0 0

7,764 5 5

5,128 0 0

1,657,955

. 54 17

296 8

15,045 9

6,278 10

96,897 17

278,925 12

10 0 0

6 0

,055,454 0 9i
359,868 15 0

2,415,322 15 9^

Lady Day 1680—
Lady Day 1681

£, s. d.

1,298,701 13 %

12 0 0

8,000 0 0

497 5 11

8,531 6 3

310 2 ^

5,758 1 Pi

1.321,810 9 llj

165 15 0

872 8 Hi

120 16 6

4,433 10 2

107,004 8 5

178,389 17 10

1,612,797 6 10
287,448 3 4^

1,900,245 10 2i

Lady Day 1681—
Lady Day 1682

1,408,298 7 5i
3,355 13 l|

321 13 6
701 19 11

10,750 0 0

5,700 0 0

701 19 11

,429,829 13 lOf

1,818 17 5i
1,069 15 0

2,041 17 10
17,220 14 9i

80 12 3

1,452,061 11 2|
69,000 0 0

1,521,061 11

Div. XV.] Receipts of the Exchequer 1679-86 535

Exchequer 1679-86 (continued).

T.ady Day 1682—

Lady Day 1683—
Lady Day 1684

Lady Day 1684—

Lady Day 1685-

Lady Day 1683

T<a,dy Day 1685

Lady Day 1686

£ s. d.

1,254,752 13 8|

1,070,990 5 7 J

1,390,191 17 5i

1,760,426 11 2i

231 0 8^

Fee Farms

872 19 6

61 14 9

449 0 0

Imprest Money
Droits

Queen's Portion
King's Money

7,454 14 5

673 17 7

Orders, &c.

Ships,&c.condemned

Plate

East India Co.

10,750 0 0

Artillery Ground

Secret Service

16,461 3 9

2,810 9 7

Captives
Poll Order

311 15 8

4,537 0 3

Money paid, &c.

954 17 4i

229 13 6

245 0 0

10,000 0 0

7,630 15 4

750 0 0

322 10 0

10,000 0 0

23,630 0 0

Part of a Debt
Treason Money
Sir W. Doyly's debt
Mr Shaw
Roger Whitby
Div. East India Co.

„ African Co.
Ireland

Queen Dowager
Conscience Money

1,291,106 9 8i

1,082,113 16 Oi

1,409,693 4 8

1,823,984 10 0|

Total (3)
2nd 18 months
11 months

690 11 llj

323 15 8

17 „ 30 Ships

307 6 11

m6 9 0

Poll Money

130 0 0

1,031 0 0

30 0 0

1st part, 1st Dbg Act

1,154 15 4

359 10 1

2nd

1,544 8 6

1,457 5 2

1,165 0 3

186 18 8i

2nd Disbanding Act

1,074 8 8i

3,608 13 2

100 0 0

12 months' Tax

497 5 6

„ „ repaid

637 0 4

Last Poll

220 0 7

321 14 3

100 0 0

500 0 0

Wine Acts
18 months
Additional Aid
Voluntary Present

1,295,477 0 2|

1,089,058 9 7

1,413,967 15 11

1,824,560 18 lOi

Total (4)

43,000 0 0

262,261 15 11

197,000 0 0

307,226 0 0

Loans

1,338,477 0 2|

1,351,320 5 6

1,610,967 15 11

2,131,786 18 lOi

Total Receipts

536

Crown and National Finance [div. xv.

STATEMENT N.

The RECFiFrs of the Exchequer 1686-94
Mus., 17,756, fF. 16 b,

Lady Day 1686—
Lady Day 1687

Lady Day 1687—
Lady Day 1688

Nov. 1688— Sept.
1691

Customs and Coinage

Impositions on French Linen, &c. .
Impositions on Tobacco and Sugar .
Impositions on Wines and Vinegar .

Excise

Hearth Money

Letter Money

First-fruits and Tenths ....

£ s. d.
f 14,950 0 0
I 629,607 10 101
133,097 10 4
168,380 12 8
171,205 18 3
631,939 11 6J
209,631 6 2
75,904 4 9 .
17,375 19 2

£ s. d.

17,500 0 0

578,710 6 11^

140,960 16 7f

141,115 0 6

163,974 13 10

666,589 19 3J

246,441 12 7i

76,317 18 10

17,354 17 9

£ s. d.
1,479,764 9 2

\ 805,006 2 6|

2,585,349 10 3|
234,066 0 1;
217,623 2 li

Total of Customs, Excise, Hearth
Money, Post Office, First-fruits and

Tenths

Goods seized

Lands seized

Rents of Lands and Duchy of Cornwall .
Redemption or Sale of Lands .

Lotteries

Alienations

Fines of Leases

Recusants Money and Forfeitures .
Sheriffs of Cities

„ Counties

1/lOth of Prizes taken from Great Mogul .

Temporalities

Imprest Money repaid ....

Sale of Farthings

Wrecks

King's Dividend, African Company .

East India Company .

Barbadoes Revenue

Post Fines

King's Bench Fines

Sale of Wood

Unwrought Wood

Baronets

East India Company Present .
Treason Money and Forfeitures

2,052,092 13 9i

7,409 7 4

0 13 4

4,778 0 0^-

1,600 0 0

173 9 8

4,714 10 10^

1,000 0 0

300 0 0

5,500 0 0

1,524 19 10^

322 10 0

750 0 0

10,630 IS 9

800 0 0

900 0 0

1,095 0 0

10,750 0 0

2,048,965 6 5
4,930 14 7^
345 19 3
6,936 5 5i

4,200 0 0

1,650 0 0

332 10 1

1,688 8 1

2,106 13 11^

574 5 8^
20,872 10 7
322 10 0
750 0 0
450 0 0

9,261 12 2^

2,402 1 11

900 0 0

1,369 15 2

5,321,809 4 3^
>- 353,444 3 7i

Total, including Small Branches,)
carried forward to pp. 538, 539 /

2,104,342 3 71

2,108,058 13 5i

5,675,253 7 10|

Div. XV.] Receipts of the Exchequer 1686-94

537

(MSS., Bodleian Library, Eng. Hist., b. 19-20; Add. MS., Brit.
24-9, 48-53, 69-74).

Sept. 1691—
28 Sept. 1692

28 Sept. 1692-

28 Sept. 1693—

28 Sept. 1693

28 Sept. 1694

£ *. d.

£ s. d.

471,078 19 1

347,941 5 10

428,003 18 4^-

Customs, &c.
French Linen

417,907 7 9

390,730 14 2i

43-1,303 18 9i

Tobacco

Wines

1/203,091 6 8i

838,981 4 9^

948,073 9 7

Excise

3,555 10 0

Hearth Money

46,448 19 3

84,929 2 2

31,699 8 4

Letter Money

16,848 9 8i

25,666 0 7

15,893 0 3

First-fruits

2,158,930 12 6

1,688,248 7 7

1,857,973 15 4

Total (1)

8,383 8 0^
647 9 3^

8,249 14 8

8,754 19 0^

Goods seized

1,983 6 6

Lands „

2,709 2 Hi

1,459 0 5^

4,457 0 m

Cornwall

791 0 0

Sale of Lands

5,807 0 1

1,991 0 0

2,188 0 0

Lotteries

1,400 0 0

2,583 17 6

1,500 0 0

Alienations

580 16 10

1,187 0 6

6,281 3 5i

Fines of Leases
Recusants

106 12 Oi

77 3 8

86 18 2^

Cities

1,024 2 10

1,084 0 3

1,113 8 9

Counties

16,638 6 11

Great Mogul

1,773 7 6^

606 3 7i

42 19 0

Temporalities

2,924 6 4

1,150 0 0

Imprest Money

8,400 0 0

1,600 0 0

Farthings

1,400 0 0

500 0 0

Wrecks

53 15 0

African Company

7,000 0 0

Plast India Company

500 0 0

Barbadoes

6,427 1 4*

Post Fines

20 0 0

King's Bench

420 0 0

920 0 0

Sale of Wood
Un wrought Wood

1,095 0 0

3,107 5 2

2,190 0 0

Baronets

East India Co. Present

200 0 0

1,830 0 0

Treason Money, &c.

2,210,593 14 10

1,712,676 19 11

1,905,146 11 7

Total (2)

538

Crown and National Finance [div. xv.

STATEMENT O. The Receipts of the

Lady Day 1686—
Lady Day 1687

T<a,(ly Day 1687—
Lady Day 1688

Nov. 1688—
Sept. 1691

Brought forward

Hanaper

Rent of Bombay

Lighthouses

Silver coined

Wine Licenses

4i per cent

Proffers

Duty on Coal

Compositions

Money paid by H.M. Direction
„ for King's Use

Irish Revenue

Redemption of Captives ....
Arrears of Old Farm of Great Branches

in Ireland

King's Share Forfeited Ship . . .
Money paid, CoL Whitley .

Lord Ossulston .
Kind's Revenue when Duke
Particular Charge, Lord Ranelagh .

Voluntary Charges

Sundry Casualities

£ s. d.

2,104,342 3 7i

37 4 7

10 0 0

366 13 4

5,605 9 1
8,260 10 8
1,214 17 9^
1,001 6 8

851 5 2
8,676 18 3

667 16 7i
6,000 0 0

7,630 15 4

635 2 8

£ s. d.

2,108,058 13 5J

37 4 7

10 0 0

46 13 4

4,650 0 0

5.000 0 0
1,176 9 7*

1.001 6 8
28 11 9

2,700 0 0
1,038 0 0

14,254 15 5
3,161 0 2

8,000 0 0
900 0 0

495 4 5

£ s. d.
5,675,253 7 10|

615,058 1 7i
159,120 3 Oi

Total, including "Casualities" .

Land Tax

Additional Aid

First 12 months' Aid

Second „ „

First and Second Polls and Review and

Additional Polls

Quarterly Polls

Review of Quarterly Poll ....

Joint Stocks

Hackney Coaches and Vellum .
Contributions on Salt . . . .
Tunnage

Sundry Small Taxes

Million Act

2,145,300 3 9f
1,451 1 11

5,797 18 4

2,150,557 19 5
585 1 0

1,557 17 5

6,449,431 12 6i
3,683,449 15 6^

Total, exclusive of TiOans .
Excess of Loans contracted over Loans

repaid

Loans

2,152,549 4 0^
183,404 0 0

2,152,700 17 10
192,920 0 0

10,132,881 8 Of
7,885,704 14 6

Total Receipts

2,335,953 4 Of

2,345,620 17 10

18,018,586 2 6i

i 1

Div. XV.] Receipts of the Exchequer 1686-94

539

Exchequer 1686-94 {continued).

Sept. 1691-

28 Sept. 1692—

28 Sept. 1693—

28 Sept. 1692

28 Sept. 1693

28 Sept. 1694

£ s. d.

2,210,593 14 10

1,712,676 19 11

1,905,146 11 7

37 4 7

Hanaper

10 0 0

Bombay

6 13 4

Lighthouses
Silver

4,062 10 5

Wine

4i per cent.

Proffers

16 8

Coal

5 13 4

48 2 0

Compositions

Money paid, H.M. Direction

„ King's Use
Irish Revenue
Captives

Great Branches
Forfeited Ship
Whitley
Ossulston
Revenue, Duke
Ranelagh
Voluntary Charges

1,336 10 0

320 7 2|

18 11 8i

Sundries

2,211,985 9 5

1,717,102 15 5j

1,905,250 9 10-1

Total (3)

14,852 4 10

867,717 0 Hi

1,883,371 7 4

Land Tax

7,126 11 4i

1,042 12 2^

1,300 8 li
2,575 7 Hi

Additional Aid

857,595 4 11

312 17 5

First 12 months' Aid

760,426 14 7i

847,432 2 1

6,045 5 n

Second

5,816 16 8

1,801 2 5

1,394 8 2i

First and Second Polls, &c.

250,557 2 0^

322,119 13 1

154,632 3 7

Quarterly Polls

3,314 4 2

2,208 7 %

Review of Quarterly Poll

21,609 10 0

Joint Stocks

44,200 0 0

Hackney Coaches

934,485 17 5

Salt

300,000 0 0

Tunnage

142 4 11

125 12 9

95 10 8

Sundries

881,493 14 2

118,506 5 10

Million Act

4,108,502 8 9i

4,664,071 4 8|

5,375,675 2 4J

Total (4)

204,044 3 8^

911,334 9 5i

Excess of Loans contracted, &c.

592,527 10 4i

Loans

4,312,546 12 6

5,575,405 14 2i

5,968,202 12 9i

Total Receipts

540

Crown and National Finance [div. xv.

STATEMENT P. Issues of the Exchequee

Navy

Ordnance

Forces

Tangier

Household

Treasurer of the Chamber

Wardrobe

Robes

Works

Ambassadors, &c

Stables

Fees and Salaries payable at Exchequer .
Pensions in respect of places .
Annuities or Pensions of Grace

,. „ „ in lieu of Diets

Band of Pensioners

Bounties in gross sums ....

Management of Customs ....

„ ,, Excise . . . .

Encouragement for building Defensible

Ships

Secret Service

Presents

Bills of Impost

Privy Purse and Healing Gold .

House Rent

Mint

Contingencies not reducible under general

heads

Payment of tallies upon Excise

Extra Postage

Prince of Orange

Jewel House Jewels

Redemption of Captives ....
Management of Post Office Revenue
„ „ Hearth Money . • .

Pensions

Tower Expense

Gardeners

To Mr John Knight, Divers Provisions .

Total, exclusive of interest and repay-
ment of loans

Loans repaid and Interest

Total issues

27 March 1679—
Lady Day 1680

806,266

44,337

426,237

77,501

150,211

18,916

17,477

8,500

22,965

46,497

9,602

33,722

17,860

101,018

2,348

3,000

8,992

39,884

9.392

s. d.

5 1

12 10

5 7

16 4

14 7
0 0
5 4^
0 0
5 0

15 11
19 3

4 8^

0 0

13 8^

0 0

10 5

10 2^

10 0

3,284 11 Hi

34,377 1 8

5,650 0 0

3,675 0 0

31,436 0 5J

150 0 0

8,810 16 5

8,502 9 8|

137,800 0 0

247 3 4

2,078,665 12 6^
650,081 9 21

2,728,747 1 2\

Lady Day 1680-
Lady Day 1681

362,500

123,282

258,423

93,162

107,750

19,137

11,345

1,500

7,007

35,760

12,528

31,811

8,367

82,139

3,064

2,642

6,058

41,190

7,000

s. d.
11 Oi

0 0
0 0

2,060 15 4

38,657 9 7

5,500 0 0

825 6 0

26,197 17 6^

15,117 3 11

14,984 1 Hi

62,200 0 0

7,994 4 2

40,000 0 0

5,758 1 8^

1,434,626 8 7
973,853 17 7

2,408,480 6 2

Lady Day 1681—
Lady Day 1682

£,

357,081

33,278

244,193

93,568

63,109

18,090

15,666

4,000

15,043

20,619

3,976

33,452

14,445

86,273

2,824

5,780

9,600

41,526

s. d.
4 2i
4 8
4 10
3 1
15

6 0

18 6
0 0
6 0

10 0

12 0

9 lU

0 0

19 9^
0 0

17 3^

0 0

1,334 2 10

55,481 13 7

2,700 0 0

19,579 7 1

3,470 3 0

7,604 10 7i

1,400 0 0

780 8 6

1,163,982 10 1
348,029 2 2^

1,512,011 12 3i

Div. XV.] Issues of the Exchequer 1679-86

541

1679-86 (MSS., Bodleian Library, Eiig. Hist., b. 4-18).

Lady Day 1682—
Lady Day 1683

Lady Day 1683—

Lady Day 1684—
Lady Day 1685

Lady Day 1685—

Lady Day 1684

Lady Day 1686

£. s. d.

£ s.

£ s. d.

363,513 1 10

331,791 4

o-i

368,949 18

367,130 13 6

Navy

42,510 0 0

57,331 9

77,163 10

70,300 0 0

Ordnance

210,429 9 9

230,236 14

235,161 0

517,124 7 9

Forces

40,281 13 5

65,401 6

46,973 6

24,125 15 0

Tangier

63,508 19 3

67,500 0

84,624 11

52,600 0 0

Household

23,641 0 10^

18,594 9

15,724 14

23,272 17 5

Chamber

7.777 0 10

8,215 6

2,139 16

1,000 0 0

Wardrobe

1,500 0 0

4,500 0

1,780 4 3

Robes

19,072 5 7

23,990 7

31,493 4

28,429 19 8

Works

17,602 10 1

8,882 2

16,825 19

37,435 7 2

Ambassadors

3,000 0 0

9.091 14

6,495 15

Stables

49,471 18 li

40,589 12

37,959 12

43,479 9 7i

Fees and Salaries

5,577 10 0

7,837 7

11,804 5

5,450 0 0

Pensions, Places

91,520 14 11

76,901 2

107,290 5

31,133 9 3

Grace

2,308 0 0

2,460 0

2,464 0

1,224 0 0

Diets

6,577 2 6^

3,000 0

4,888 16

3,000 0 0

Band of Pensioners

10,684 11 11

6,661 8

12,277 6

44,886 0 6

Bounties

45,209 1 8

42,400 1

50,948 0

42,146 18 9i

Customs

9,476 18 0

14,772 8

22,262 1

22,348 17 Hi

Excise

355 5

45 10

Encouragement

59,315 7 8i

86,240 15

56,954 0

118,890 16 6^

Secret Service

4.880 0 0

1,884 1

Presents

94 10 0

96 12

96 12 0

Bills of Impost

22,929 0 6

25,632 12

17,438 5 10

25,950 0 0

Privy Purse
House Rent
Mint

6,437 11 3

6,700 0

13,000 0

6,234 15 8

11,280 18 1

3,010 9

14,048 9

15,961 15 3

Contingencies
Tallies upon Excise

2,282 0 0

Postage

Prince of Orange

3,131 18

21,087 0 0

Jewels

2,980 0 0

1,500 0

5,560 0

3,615 3 0
6,779 18 9

Captives

Management P.O.
Do. Hearth Money

4,398 4 4

79,636 9 U

Pensions

Tower
Gardeners

9,000 0 0

Mr John Knight

1,123,861 6 4

1,145,576 12

1,250,124 8

1,608,518 15 6

Total

244,541 12 8*

153,729 1

323,260 5

l.=f

391,902 8 1

Loans

1,368,402 19 OJ

1,299,805 13

9d-

1,573,384 13

••

2,000,421 3 7

Total issues

542

Grown and National Finance [div. xv.

STATEMENT Q.

The Issues of the Exchequer 1686-94 (MSS.,

17,756, fF. 17, 25-30,

Navy

Army

Ordnance

Tangier

Ambassadors

Secret Service

Mint

Fees and Salaries

Pensions

Band of Pensioners . . . ■ .
Bounties and Rewards . . . .
Management of the Customs .
„ „ Excise

„ „ Hearth Money .

Post Office .
Defalcation Post Fines . . . .
Redemption of Captives . . . .

Stationery

States General

Privy Purse

Queen Consort

Wife of James II

Household

Treasurer of the Chamber ....

Wardrobes

Works

Master of the Horse

„ „ Robes

Jewels and Plate

Gardens

Law Expenses

Free Gifts

Arrears of Salaries and Wages to Servants

of Charles II

Contingencies

Extraordinary Debentures, Portage Bills,

Customs and Packet Boats .
Service of Prince of Orange. West and

North

Surphis of Receivers' Accounts

Charges of Prizes

Commissioners' Accounts ....
Charges of the Commission for the Bank .
Parks, Rent paid and Sundries

Total, exclusive of interest and repay-
ment of loans

Annuities on Survivorship, and under

Million Act, and Expenses thereof
Excess of Loans repaid over Loans con-
tracted

Loans repaid and Interest ....

Total Issues

Lady Day 1686—
Lady Day 1687

444,805

634,259
86,904
26,874
32,447

104,491
15,155
60,863

158,910

9,000

14,913

50,530

22,087

3,408

s. d.
4 10
6 10
11 2i

203,777
30,043

13 3i
3:^-

6
6
2

0 0
11 6^

3,011 19 0

27,300 0 0

66.156 15 8J

26,527 2 7

14,600 0 0

25,285 0 0

12,090 0 0

1,250 0 0

10,400 0 0

6 H
15 5i

Lady Day 1687—
Lady Day 1688

2,093,826 18 2|

428,188

580,000

93,275

21,200

28,089

107,632

7,775

65,144

88,039

6,000

23,242

58,572

13,334

1,720

4,917

0 0
2 11

18 6i

1 8i

6 2|

0 0

1 6i
19 0

5 7

9 7

13,000 0 0

79,261 10 10

35,529 15 8

20,775 11 lOi-

20,276 18 2'

16,846 11 5^

2,500 0 0

8,7.33 18 2

137,183 4 8
36,979 6 2|

,898,218 4 4

1,898,218 4 4

5 Nov. 1688—
29 Sept. 1691

£ s. d.

3,126,037 8 Oi

5,948,902 16 7^

674,493 17 6^

70,180 11 1

282,258 16 7

23,067 11 3

425,347 8 8i

288,535 6 10

15,000 0 0

20,794 10 1

10,548 18 7
500 0 0

600,000 0
79,160 0

106,250 0
1,332 3

261,608 14

119,141 17
75,532 13

13,050 0 0

16,481 4 3

223,539 2 8

5,905 4 6

59,880 14 3^

267,691 18 2

32,054 15 7

7,467 13 3i

21,018 19 9

4,250 0 0

2,310 0 0

12,782,342 6 2^

5,055,440 15 A\

17,837,783 1 7

Div. XV.] Issues of the Exchequer 1686-94

543

Bodleian Library, Eng. Hist., b. 19, 20; Add. MS., Brit. Mus.,
49-54, 70-5).

29 Sept. 1691-

28 Sept. 1692—

28 Sept. 1693-

28 Sept. 1692

28 Sept. 1693

28 Sept. 1694

£ s. d.

£ *. d.

1,232,424 0 7

1,925,327 18 5

2,124,221 7 1U

Navy

1,895,942 15 11

2,345,548 6 7i
379,408 19 111

2,118,204 9 5f

Army

252,913 5 4

239,307 6 8

Ordnance

Tangier

24,026 4 9

40,284 14 9i

25,011 14 11

Ambassadors

42,601 0 9i

57,509 5 8i

43,606 7 8f

Secret Service

12,146 12 9

5,137 10 0

6,775 0 0

Mint

84,152 3 n

67,408 9 8^

87,433 7 7

Fees and Salaries

49,026 7 n

65,379 14 11*

32,084 13 2^

Pensions

3,000 0 0

4,500 0 0

6,000 0 0

Band of Pensioners

9,790 2 6i

16,431 3 7^

31,074 1 73

Bounties and Rewards

Customs

Excise

Hearth Money

Post Office

6,427 1 4^

Post Fines

500 0 0

958 12 4

Captives

11,864 9 7

5,508 10 2

Stationery
States General

27,500 0 0

22,500 0 0

39,795 0 0

Privy Purse

61,500 0 0

52,000 0 0

64,000 0 0

Queen Consort
Wife of James II.

103,599 19 11

100,286 9 0

99,109 4 0

Household

32,932 15 Of

41,373 0 5^

36,818 16 3^

Chamber

23,943 2 0

17,320 4 9

15,500 0 0

Wardrobes

31,659 18 7i

104,351 5 3i

14,814 13 6

Works

36,094 5 0

11,324 11 0

13,800 0 0

Horse

3,500 0 0

7,100 0 0

Robes

9,245 7 0

3,880 1 2

5,900 0 0

Jewels, &c.

6,140 0 0

12,007 5 0

5,074 9 8

Gardens

3,500 0 0

3,700 0 0

3,288 5 0

Law Expenses
Free Gifts

33,058 14 0

35,548 1 3i

25,119 16 9J

Servants of Charles II.

Contingencies

Debentures, &c.

Prince of Orange

2,766 6 lU

2,130 0 9

Receivers' Accounts

Prizes

Commissioners' Accounts

3,000 0 0

Bank

1,561 5 3

347 17 5i

1,038 4 0

Sundries

3,987,184 1 7i

5,327,164 8 Of

5,055,715 9 3|

Total

111,812 16 2

Annuities

523,410 2 5

Excess of Loans

196,680 10 7

208,299 12 5

311,814 13 10

Loans and Interest

4,183,864 12 2\

5,535,464 0 5J

6,002,753 1 8|

Total Issues

544

The Crown Debt 1679

[div. XV.

STATEMENT R. The Debts of Charles II., March 31, 1679
(Add. MS. 28,078, f. 320).

Navy .

„ for 30 ships
Ordnance
Tangier
Privy Purse
Works
Chamber
Stables
Wardrobe
Robes .
Tents 1
Tower .

Secretary of State
Queen and Duke of York
Salaries and Pensions

Total .

1 This is noted on the margin of the MS. as

557,233

150,000

293,050

42,900

23,000

39,478

35,000

12,536

47,516

5,000

29,047

8,000

6,024

9,050

200,000

1,457,834

a supposed extravagant account.

INDEX

Abchurch Lane, 66

Aberdeen, 256; woollen manufactures at,

158, 160; pin manufactory at, 188
Abernethy, timber from, 429
Acadia, company for a settlement in, 457
Advertizing, ingenuity of Capt. Poyntz in

advertizing his Tobago scheme, 416
Advowsons, company for purchasing, 455
Africa, trade with, 294, 300
African companies, 205, 220, 236, 353, 428,

449, 450, 472, 473, 478, 479

— House, 93

Agriculture, company for improving, 456

Aislabie (John), 316; charges against the
Bank of England, 235, 240; efforts on
behalf of the South Sea company, 238;
proposal for conversion of the National
debts, 305, 314; evidence concerning
him, 336-9; his punishment, 344

Aitcheson's Haven, bottle and glass manu-
factory at, 190

Alamodes, see Lustrings

Aldermanbury, 13, 72

Aldersgate Street, 394

Alen(?on, Duke of, outlay on his behalf, 502

Alum, manufacture in Scotland, 193, 194;
company for improving British alum
works, 454

Alva, 500

Ambergris, 450; to be found in Tobago,
417

America, trade with, 294, 300; company
for working iron and copper in, 449;
companies for trading with, 450, 452

Amicable and Most Beneficial Society, 392

— Contribution for insuring from loss by
Fire, see Hand in Hand Society

— Society (1706), 368, 390, 391, 395
Amisfield, 158

Amsterdam, Bank of, foundation, 200

— marine insurance in, 400

Am well, water supply from, 18, 22, 28, 468

Anatomy of Exchange Alley, quoted, 222,
226, 237, 411

Anderson, Adam, on the Hampstead Aque-
ducts, 6; on the Sword Blade company,
436

Andrews, Benjamin, tenders for the postal
service, 41

Angli(B Tutamen, quoted, 6, 59, 67, 71, 77,
96, 109, 111, 211, 420, 436

S. C. III.

Annapolis, fishery at, 461

Anne, Queen, 27, 288, 295; illness, 229,
231 ; false report of her death, 231, 232,
284

Annuities, 277, 278, 285, 289, 290, 292,
389 ; annuity scheme of the Beech Oil
company, 115-17; conversion by the
South Sea company, 309, 310, 318, 319,
322, 330 ; position of long annuitants,
349, 350 ; companies for purchasing and
paying, 445, 448

Antimony, to be brought from Tobago, 417

Antwerp, debt due at, 496

— Tavern, 449

Apparel, magazine for, 467

Apprentices, teaching of, 159, 194 ; in-
surance on, 370, 392-4

Arachne, Ireland compared to, 103

Argin, company for trading to, 450

Argyle, Duke of, 265

Arlington, Lord, takes proceedings against
the Penny Post, 49

Armagh, linen manufacture near, 101

Armour, James, his woollen manufacture,
158, 159 ; scheme for a land bank, 159,
261, 262

Army, its wretched condition after the
Eevolution, 203

— Debentures, exchanged for Sword Blade
stock, 437

Arundel, Lord, his fishing association, 471
Asgill, John, 246; land bank promoted by,
249, 250 ; failure of government loan,
251, 252
Ashton, Dr, his insurance scheme, 368
Assiento contract, 298
Association, adventurers for, 471
Astell, William, punishment of, 345
Auchterlony, James, his wool-card mono-
poly, 176
Austin Friars, 76
Ayloff, Sir Benjamin, 14
Ayr, cloth factory established at, 125

Bacon, Sir Nicholas, estimate for national

defence, 495, 496
Baillie, John, imports English cloth, 146
Baizes, manufacture of, 129, 253
Baltic, export of cloth to, 156
Bangor Court, 393
Bank contract, 240, 241

546

Index

Bank Dialogue, a, 249

Bank of Amsterdam, foundation, 200

— of Credit on Land Kents, 246-9

— of England, 5, 246, 251, 258, 259, 269,
275, 280-3, 286, 288, 294, 296, 298, 314,
323, 352, 367, 425, 437, 438, 476, 477;
history of, 199-245 ; run on, 280, 292 ;
fall in price of stock, 282; loan to the
State, 290, 291 ; proposal for conversion
of National Debts, 305, 306; relations
with the South Sea company, 327 ; pur-
chase of South Sea stock at the re-adjust-
ment, 347 ; payment of the Equivalent
to Scotland, 267, 268

— of Scotland, 5, 173, 246, 478, 479 ; his-
tory of, 253-74; competition of the
Darien company, 256 ; attempt to absorb
by an Edinburgh insurance company,
374

Bankers, Price's Handbook of London
Bankers, 454

Banking, need of banks in the seventeenth
century, 200 ; various banking schemes,
200, 201 ; bank schemes following the
success of the Bank of England, 208

— and financial companies, 199-360
Bankrupts, company to buy their stock,

451
Barbadoes, 416, 417

Barbary, company for trading with, 450
Barbon, Nicholas, 246, 247, 473 ; land bank

promoted by, 249, 250; failure of pro-
posed loan to the Government, 251, 252 ;

his fire office, 372, 373, 375-7
Barcelona, ordinance relating to marine

insurance, 364
Barrau, David, 80 ; impeached for smuggling

lustrings, 83
Barrington, Kobert, absconds with Widows

and Orphans' funds, 390
Bastard children, company for maintaining

and educating, 455
Baudivin, Gustavus Adolphus van, engaged

in the brass manufacture, 108
Baudowin, Ken^, prosecuted for smuggling

lustrings, 83
Baudran, Nicholas, a banker, treasonable

correspondence with Goudet, 82
Bayly, Wm., patent for printing figured

paper, 72
Beads, manufacture in Virginia, 466
Beck, Sir Justus, his marine insurance

undertaking, 396
Bedford Court, Covent Garden, 393
Bee-Hive Society, 392
Beech Oil company, 429, 480, 481 ; account

of, 115-17
Bell Court, Cheapside, 392
— — Fleet Street, 393
Bell's Wynd, 133
Bells, founding of, 187
Benbrigge, John, his banking scheme, 200,

201
Beneficial Society, 392
Berwick, garrison at, 495
Billingsley, Case, his marine insurance

undertaking, 396, 397 ; his land develop-
ment scheme, 421

Bills of Mortality, importance in relation!
to life insurance, 366

Binning, John, on Dupin's Scottish mining^
venture, 187

Birchin Lane, 15

Births, insurance of, 392

Bishop's Gate, 393, 394

Bishopsgate Street, 119

Black, William, his woollen manufacture,!
158, 161, 162

— Boy, Newgate Street, 119

— Horse, office of the City Conduits, 12

— Lion, Drury Lane, 394

Blackmore's Head, Lombard Street, 451 ^
Black Swan, 454 A

— — Shoreditch, 393 ^
Blackwell, Kichard, partner in the under-
taking for reducing postal rates, 39, 40

Blackwood, Kobert, promoter of the New-
mills cloth factory, 138
"Blanks," 309
Blue Boar, 394
Blufe-Coat Coffee House, 455
Blue Paper company (1691), 71, 72, 119

— — Warehouse, 72
Blunt, Henry, 441

— Sir John, 315, 441; attitude on the
conversion scheme, 314; gives informa-
tion concerning the South Sea company,
336, 343; value of his estate, 344; his
punishment, 345, 346

Boat-building company, 467

Bodleian Library, 485, 486

Bolt Court, 393

Bond Street, water supply, 13, 420

Bennington, cloth factory at, 125, 126

— Mills, 159, 160

Books, import of English books from Hol-
land, 184, 185

Borough waterworks (1690), 32

Borrowstounness, export of sheep-skins
from, 155

Bottles, manufacture of, 110 ; tax on. 111 ;
Scottish manufactures, 189-92; com-
pany for making, 454

Bottomry, loans on, 363; definition, 364;
company for, 445

Bounce's Coffee House, 393

Bower, William, Lord Mayor, 4

Brabant, States of, 335

Brand, Alexander, his stamped leather
monopoly, 194

Brass, company for making, 105, 108

Brazil, 416

Bread Street, 60

Breeches, manufacture of, 456

Bremen, import of timber from, 456

Bribery, amount disbursed by the East
India and South Sea companies, 335, 344

Brihuega, reverse at, 229

Briscoe, John, 246, 247, 249, 367 ; founds
the White Paper company, 64 ; his land
bank scheme, 250; proposed loan to the
Government, 251

Index

547

Bristol, fire insurance office at, 374
British Fishery, 446

— Insurance Fire Office, 447

— Museum, MSS. at, 486
Broad Street, 6, 13

Broderick, Sir Thomas, chairman of the
Committee of Secrecy, 333

Broken Wharf, 15

Broomsticks, import of material for, 454

Brouncker, Henry, his tapestry manufac-
ture at Mortlake, 118

Brown Paper company (1692), 71

Bruce, Peter, his paper mill and playing-
card monopoly, 181

Brushes, import of materials for, 454

Bubble Act, 374

Buckingham, Duke of, 113

— Street, 418

Bucknall, Balph, his water undertaking,

418
Buffalo's Head, 453
Building, Dr Nicholas Barbon a building

speculator, 372; building companies,

454-6
Bull Head Tavern, 452
Bunch of Grapes, 392, 393
Bunhill Fields, 13
Burgess, Thomas, promotor of an annuity

company, 446
Burial, act ordaining use of Scots linen

only in burial, 163
Burleigh, Lord, on currency, 262
Burnaby, Eustace, enterprize in paper

manufacture, 63, 90; patent for weaving,

90
Busby, John, invention for drying malt,

454
Busby's Chambers, Gray's Inn, 454
Butter, manufacture of, 450
Byfleet, 64
Byng, Admiral, defeats the Spanish fleet

at Passaro, 236

Cadiz, expedition to, 504; sack of, 506;
cost of the expedition, 527

Cairnes, Sir Alexander, his marine insur-
ance company, 396

Calico, companies for making and printing,
450-2

Cambric, manufactory at Dundalk, 98, 104 ;
company for dealing in, 455

Cambridgeshire, fens in, 470

Campbell, David, partner in the North
Sugar House, 136

— G., patent for making salt, 448

— Matthew, partner in the North Sugar
House, 136

Campeachy, Bay of, company for trading

to, 450
Canada company, 470
Candler, Richard, insurance patent, 364
Candleriggs, sites of the Soaperie and

Wester Sugar House, 131, 133
Candles, prohibition of use of fine rags for

wicks, 181; candlemakers' petition, 184
Cannons, founding of, 187

Canongate, 125

Canon Street, Glasgow, site of the

"Soaperie," 131
Cape Sable, fishery at, 451
Caps, making of, 456
Capstack, George, his oil mill, 115
Cardigan, mining in, 472
Cardonell, Adam de, 64
Carlile, Alexander, his proposed planting

company, 464
Carlisle, Earl of, Tobago given to, 415
Carolina, 458; fishing company, 449

— Coffee House, 445
Carved Porter, The, 392
Castle Hill, Edinburgh, 187

— Leazes, springs at, 35

— Tavern, 452, 453

Caswall, Sir George, 337, 440, 441 ; found

guilty and committed to the Tower, 341
Cathay company, 464
Catholics, plots against Queen EUzabeth,

499, 503
Causton, William, scheme for life insurance,

368
Cecil, Robert, Lord Salisbury, on the gifts

of Elizabeth to the Earl of Essex, 508;

statement on Elizabethan finance, 503,

505
Chadwell, water supply from, 18, 22, 28,

468
Chamberlain, Hugh, 246; association with

the Penny Post, 43; scheme for a land

bank, 159, 204, 260-2, 265, 478, 479;

founds the Bank of Credit, 247
Change Alley, 203, 237, 448
Channel Islands, paper and linen company

(1691), 71
Charing Cross, water supply, 13, 420

— — station, 418

Charitable Corporation, 373, 380, 428, 429,
480, 481

— Society of single persons, 393
Charles I., 39, 123, 367, 485 ; his transaction

with the New River company, 23, 24;
encourages rival schemes, 25; finances
in his reign, 528, 529

— II., 12, 43, 52, 54, 73, 105, 118, 162;
orders naval ships to be sheathed with
lead, 106 ; personal expenses, 199 ; stops
the Exchequer, 201 ; high interest subse-
quently paid by, 202 ; restoration of, 415 ;
finances in his reign, 530-5, 540, 541, 544

— Street, 13

Charteris, Colonel, purchases Newmills,

158
Charters, their renewal a source of revenue

to the State, 199
Chastity, insurance of female, 374
Cheapside, 13, 392
Chelsea Water Company, 27
Cheshire Cheese, The, Whitechapel, 394
Chester, water supply of, 25, 34

— Chief Justice, 5

— Robert, 315

Chetwynd's (Lord) Insurance, see Loudon
Assurance

35—2

548

Index

Children, insurance of, 370, 392, 393,394, 457
China, manufacture of, 136
China Shop in St Mantin's, The, 450
Chipping Wycombe, mayor opposes the

White Paper company, 65
Church, its position regarding usury, 364
City Conduits, 26, 476, 477; account of,

13-15 ; compete with the York Buildings

company, 420

— Council, see Common Council

— of Bristol, sign of the, 393

Civil List, arrears to be cleared off by in-
surance companies, 402

— Wars, 24; losses of, 201
Clergy, insurance of widows, 368
Clerkenwell Close, 393

Cloak Lane, 435

Cloth, manufacture in England, 101 ; intro-
duction of Flemish weavers into Scotland,
124; establishment of Scottish factories,
125, 126, 143; account of the Newmills
factory, 138-58; smuggling in Scotland,
146 ; import prohibited, 151 ; increase of
Scottish export, 154; revenue from cus-
toms on, 494

Clothing, cost of military, 149

Cloth-makers, jealous of the linen manu-
facture, 94, 95

Coal, mining unprofitable in Scotland, 186;
mining carried on by the York Buildings
company, 429; companies for supplying,
448, 455

Cochineal, 506

Cochrane, Mungo, pai-tner in a Glasgow
woollen company, 160

— William, his woollen manufacture, 158
Coinage, Dupin's petition for coining in

Scotland, 187; clipped money called in,
208; reform of, 267
Colchester, company for making bags in
(1720), 455

— Baizes (1693), manufacture of, 173
Cole's Coffee House, 454

— office, 453

Colebrook's Insurance, see Ram, Stephen
Coleman Street, 13
"College" Loan, 169
Colour Mill company, 445

— — House, 445
Combs, manufacture at Leith, 193, 194
Commercial Union Assurance Co. absorbs

the Hand in Hand Society, 379
Commissioners of Customs, 74

— of Fines and Forfeitures, 179

— of the Equivalent, 173

— of Trade, report of, 67, 68, 96
Committee of Posts, 42

— of Secrecy, 442; reports on the South
Sea company, 233, 241, 338, 339

— of Trade (Scots), 131, 151, 165, 166,
167, 190

Common Council, 3-5, 11, 12, 19, 20,
39, 52, 54-6, 58; efforts to procure a
better water supply, 3, 4; establish a
postal service to Scotland, 39; order as
to street lighting, 52

Commons, House of, 21, 39,
85, 204, 208, 226, 227, 236,

68, 69, 72, 82,
238, 251, 301,
305, 315, 316, 329, 332, 334, 339, 343-5,
402, 404, 442 ; committee of enquiry into
the smuggling of lustrings, 80-3; dis-
orderly crowd at the reading of the South
Sea bill, 347 ; committee of enquiry into
fisheries and insurance, 400; Journals
of, 486

Companies, attitude of the State to, 324;
list of insurance companies, 392-4; list
of companies promoted during the South
Sea period, 445-58; statistics of com-
panies, 462-81

Company of Advantageous Insurers, 392

— of London Insurers, see Sun Fire Office
Consols, compared with Million Bank stock,

279, 280
Convex lights (1684-1744), 52-60, 474
Cooper's Coffee House, 449
Copper, 449 ; mines developed by the York

Buildings company, 429; society for

making, 464, 465

— miners company, 457, 474
Coral-fishery company, 452

Cordage, manufacture in Scotland, 129, 173,
175 ; duty on imports, 174 ; sec also Rope

Cornhill, 13, 445

Corn-trade, company for carrying on the,
455

Cornwall, drainage of mines in, 186, 187;
tin and lead mines in, 453

Corse, John, his woollen and linen manu-
facture, 158, 161

Corstorphine, bleaching ground at, 167

Cotton, companies for growth and manu-
facture, 451, 452

Council of State, 39, 41, 42

Courland, Duke of, attempt to plant Tobago,
415

Court of Wards, 491, 492, 494

Cow's Face, Crooked Lane, 393

Craggs, James, senior, Postmaster-General,
336, 344 ; suicide of, 337, 343

— James, Secretary of State, opposed to
South Sea enquiry, 331, 333; causes a
scene in the House of Commons, 334;
death, 337; amount of stock received,
339

Crane, Sir Francis, introduces the making
of tapestry, 118

Crape, company for making, 453

Credit, state of, prior to the Revolution,
199

Crommelin, Louis, value of his looms, 79 ;
his linen company, 98 ; on the Irish linen
trade, 101 ; establishes a linen manufac-
ture in Ireland, 102, 103

Cromwell, Oliver, 40, 133 ; method of deal-
ing with forfeited estates, 422

Crooked Lane, 393, 394

Cross Keys and Bible, Cornhill, 445

— — Tavern, 452, 456
Crown, The, 454

— Lands, 487; company for improving,
455; sale of, 503

Index

549

Cumberland, Sword Blade company's mills

in, 435
— Earl of, 501
Currency, proposals for a paper currency

in Scotland, 259, 260, 265, 266
Currie, James, Provost of Edinburgh, his

wool-card monopoly, 176, 180
Custom House, 77, 82, 88, 90
Customs, farming of, in Tudor period, 488
Cutlers Hall, 435

Daily Courant, 225

Dallows, Philip, engaged in the glass bottle
manufacture. 111, 113

Dairy, paper mills at, 181

Dalrymple, Sarah, her monopoly for im-
porting mirrors, 191

Dalston, 12, 13

Dalziel, General, his dragoon regiment,
144, 145

Darien company, 7, 170, 253, 257, 272 ;
competition with the Bank of Scotland,
256; its collapse, 258, 259

Darlington, linen from, 96

Davenant, Charles, on the scarcity of
money in 1697, 209

Davis Straits, whale fishing in, 450

Deal, fresh water supply, 454

Deans, James and Thomas, their rope
work, 173, 174

Dean's Head, 393

De Cloux, Pierre, introduces the lustring
industry, 73, 74

Defoe, Daniel, on the Orphans' Fund, 54;
on stock-jobbing, 108; on dishonest com-
pany promoters, 109; on the export of
wool from Scotland, 156

De Laune, Thomas, on the Penny Post, 46

Denmark Street, 6

Derby, water supply, 35

Derbyshire, tin and lead mines in, 453, 458

Desmond Kebellion, 527

De Torcy, peace negotiations of, 282

Devil Tavern, Charing Cross, 456

De Vois, Cornelius, his mining company,
464

Diamond companies, 449, 453

Diharce, Peter, prosecuted for smuggling
lustrings, 83

Dikes, Cuthbert, undertakes the water sup-
ply of Newcastle, 34, 472

Dispensary, The Grand, 453

Dippiug company. The (1691-2), 105, 108

Dittees, company for making, 455

Dividends, payment in kind, 113; restricted
by gas acts, 201

Dockwra, William, establishes the Penny
Post, 43; carries on the undertaking by
himself, 46, 47; forms a new company,
48; receives a pension, 50; his losses in
the Penny Post, 50, 51 ; his company for
making ordnance, 108, 109

Dodsworth, C, engaged in the glass trade,
110

Domestic servants, insurance of, 370, 392,
393

Douglas, Bailie, 142

— Kobert, his whale fishing enterprize,
132 ; attempt to establish sugar works at
Leith, 135, 136; starts a soap manufac-
ture there, 195

D'Ouvilly, Sir Gilbert, proposed banking
scheme, 201

Dowgate, 22

"Dowlas," sale of, 94

Downing Street, 394

Drainage, engine for drainage in Scotland,
129; Marmaduke Hudson obtains rights
for Scotland, 186, 187; companies pro-
moted for drainage works, 451, 452, 455

Drake, Sir Francis, outlay and profits of
his voyages, 501-4, 506

Dredging, engine and companies for, 452,
456

Drogheda, linen company at, 98, 99 ; amal-
gamated with the Irish linen corporation,
100

Droitwich, salt works at, 474

Druggets, company for making, 457

Drury Lane, 394

Dublin, financial speculation in, 331; pro-
posed fire insurance company at, 374

Dudley Court, 6

Duke Street, 13

Dumfries, export of sheep-skins from, 155

Dunbabbine, John, his pin manufactory at
Aberdeen, 188

Dundalk, cambric factory at, 98

Dundee, 177, 256; taken by Gen. Monk,
126

Dunlop, William, partner in a Glasgow
woollen company, 160

Dunston, John, a shareholder in the White
Paper company, 64

Dupin, Nicholas, interested in the White
Paper company, 64; founds an Irish
paper company, 71; his linen manufac-
ture, 90; establishes linen manufactures
in Scotland and Ireland, 92; quarrel
with Howard, 94; account of the Irish
linen corporation, 99, 100; account of
the Scots linen manufacture, 162-9 ;
establishes the Scots white paper com-
pany, 182, 183; his Scottish mining
company, 187

Durham, linen weavers in, 97

Dutch, their profitable fisheries off the
Scottish coast, 123; they hold Tobago,
415

Dyeing, 148, 159, 170; company for en-
couragement of, 452

Dykes, Cuthbert, see Dikes

Earthenware, manufacture of, 136 ; works
at Glasgow, 193, 195; proposed manu-
facture at Leith, 195

Eastcheap, fire in, 374

Easter Sugar Work, 133, 134

East India company, 124, 199, 205, 210,
220, 226, 235, 236, 280, 294, 308, 314,
352, 425, 464, 465, 478, 479 ; Penny Post
used to announce issue of new stock, 49 ;

550

Index

attacks the credit of the Bank of England,
217 ; submits to arbitration, 225 ; .declines
to purchase South Sea stock, 347
East India company (New co. ) , 252 ; effect of
its foundation on the stock market, 214 ;
supported by the Bank of England, 217;
loan to the State, 290, 291

— — — (Scottish), 124

— — trade, objections to, 105

— Indies, adventurers to, in the ship
William, 470

— London Water company, 29, 30, 33

— Smithfield, 31

Edinburgh, Flemish weavers in, 124, 125 ;
foundry established in, 129; rate of ex-
change, 138 ; the town guard licensed to
import cloth, 145; woollen manufacture
at Paul's Work, 158; town council's sub-
sidy for teaching apprentices, 159 ;
financial speculation in, 331 ; fire in-
surance in, 271, 272, 374

Edinburgh Courant, suspended by the Privy
Council, 185

— Gazette, suspension of, 185

Elcho, David, Lord, his glass manufacture

at Wemyss, 191
Elizabeth, Queen, 18, 63, 294; finances in

her reign, 487-629 ; her personal expenses,

498; plots against, 499, 503; her share

in Drake's and other voyages, 501-4, 506;

cost of wars in her reign, 527
Elliot, William, his silk undertaking, 169,

170
Elm, trunks of elm-trees used for water

mains, 26
Ely, Isle of, fens in, 470
English Channel, severe storm in, 220
English Inquisition, The, 386

— Memorial, The, 385

Engrafted stock, 213 ; repayment of, 214-16,

218-20, 224, 225
Ensham, paper-mill at, 63
Equivalent Debentures, 269-71
"Equivalent Money," 157, 225; payment

of, 267
Essay on Projects, 96
Essex, Earl of. Queen Elizabeth's alleged

gift to, 508
Estates, companies to deal in, 445, 447,

452; purchase of forfeited, 421-4
Eugene, Prince, loan to, 292
Evans, Sir Stephen, founder of the Sword

Blade company, 435
Exchange, high rates of foreign exchange

a hindrance to commerce, 200

— Alley, 203, 237, 448
Exchange-House Fire Office, see Sun Fire

Office
Exchequer, stoppage of, by Charles II.,
201; receipts and issues, 485, 493

— Bills, forgeries of, 214; circulation by
the Bank of England, 225, 227-9, 231;
negotiation of, 293

Exeter Exchange, 252
Expectation of Life, lack of knowledge
hampers early insurance schemes, 366-8

344

Ezekiel, prophet, quoted, 54

Fair Society, 392

Faithful Office, 392

Fellows, Sir John, speech on the South

company, 328 ; value of his estate, 344
Felt hats, company for making, 453
Fenchurch Street, 393
Fens, conservators of the, 470
Ferns, used in glass-making, 191
Fetter Lane, 436
Finance, financial and banking companies,

199-360; crown and national finance,

485-544
Fire, Great Fire of London, 4, 12; its

effect on water companies, 25; influence

on insurance, 372, 389 ; fire losses reduced

by improved architecture, 363
Fire Insurance, 372-4, 446-8, 450, 457,

472; high premiums on wooden houses,

373; undertakings for fire insurance,

375-88, 407, 446, 447, 458

— Office, The (1667-1703), 372, 373, 375-7
First Fruits, 488

Fisheries, encouragement of Scottish
fisheries, 124, 125 ; committee of en-
quiry into, 400

Fishery companies, 445, 449, 451, 456, 458,
467, 470, 471

Flanders, Crommelin on trading companies
in, 102; debts in, 498, 500; cost of army
in, 502 ; loans to, 507

Flax, number employed in spinning in
Scotland, 163; perfection of the industry
in Scotland, 168; companies for pro-
moting the industry, 98, 101, 451

Fleece Tavern, 447, 452, 455

Fleet Street, 13

Fleur de Luce, The, 393

— — — Society, 393

Flintshire, company for drainage in, 455

Flying Horse, The, 392

Flying Post, The, 225

Foenus nauticum, possible origin of marine
insurance, 363

Folly Waterworks (1680), 35

Fore Street, 13

Forfarshire, Panmure estates in, 429

Forfeited estates, purchase of, 421-4

Eouiis, Sir John, of Ravelston, shareholder
in the Linen Corporation, 166

Founding House, Edinburgh, 187

Fountain Court, 393

Fountain Tavern, 393, 452, 455, 457

Foxhall, 113

Fox Ordinary Court, 457

Framework Knitters' company, 456

France, import of paper from, 63; war
with, 65, 75, 218; observation on trading
corporations in, 102; war with the Ger-
man Empire, 218; fear of invasion by,
225, 226; its effect on stocks, 282; war'
of 1702-13, 292; financial crisis com-
pared with the South Sea failure, 351;
loss of ships in war with, 364, 365 ; war
expenditure in time of Elizabeth, 502, 505

Index

551

Francis, John, on early forms of life in-
surance, 366; on the collapse of the
insurance boom, 371

Freke, John, Prices of Stocks, quoted, 280,
399

Friendly Insurance office (Edinburgh), 374

— Society (1683), 373-5, 378, 379, 393
Frobisher's voyages, expenditure and re-
turns of, 501, 502

Frost, injures waterworks at Newcastle, 35
Funerals, company for furnishing, 447
Fur-trading company, 467

Gairdin, Lyell's woollen manufacture at,

158
Galloway Whites, export of, 152
Gardiner, S. E., history referred to, 485,

493
Garraway's Coffee House, 445, 446, 448,

452, 455, 457
Garret, Samuel, 60
Gas Acts, maximum dividends allowed by,

201
Gemmill, Peter, partner in the Wester

Sugar Work, 134
General Post, wages paid by, 47, 48; action

against the Penny Post, 49 ; penny post

established by, 50 ; see also Penny Post,

Postal Service
General Remark, The, paper circulated by

Povey to advertize his insurance schemes,

381
Generous and Amicable Societies, 393

— Society, 393

Genoese bankers, loans from, 498, 500

George I., 237 ; proclaimed king, 232 ;
friction with Lord Townsend, 234; mes-
sage favouring insurance, 402, 404

George, Prince of Wales, interest in the
Lustring company, 88

George Tavern, The, 455

Germain Street, 13

German Balls company, 118, 120

Germany, war with France, 218, 220; war
with Spain, 236; company for trade to,
447, 448; import of timber from, 449,
456

Gervaise, Lewis, arranges the finances of
the Lustring company, 75

Gibbon, Edward, 315; value of his estate,
344

Gilds, provisions for insurance of members,
363

Glasghu Fades, 134

Glasgow, sugar-refining companies in, 133-
7; export of sheep-skins from, 155;
woollen manufactures at, 158, 160, 161;
linen industry at, 169; closing of the
branch of the Bank of Scotland, 257

Glass, companies for the manufacture of,
110-14, 451, 454; tax imposed on, 111,
112 ; effect on the industry, 112 ; the tax
remitted, 113 ; patent for manufacture at
Wemyss, 124; manufacture at Leith,
128; account of Scottish glass works,
189-92; import into Scotland forbidden,

190, 191; factory started by the York
Buildings company, 429, 430; manu-
facture in Virginia, 466
Glass and Earthenware Sellers company, 110

— Bottle company (1694), 110-14

— Globe Lights (1692-3), 55, 56

— Makers company (1691), 110-13, 474
Globe Coffee House, 457

— Fire Office, 448, 450

— Lights, see Glass Globe Lights

— Tavern, 450, 451, 453, 454, 457
Gloves, manufacture of, 456
Godolphin, Lord, arbitrates between the

East India companies, 225; his dismissal,

229
Gold, companies for raining, 457
Golden Ball. The, 452

— Beehive, The, 392

— Islands company, 458

Goldsmiths, as early bankers, 199 ; marine

insurance carried on by, 364
Good and Friendly Society, 393
Goodman's Fields, 15
Gordon, James, gunpowder partnership, 193
Gordon's Mill, 161
Gore, John, punishment of, 345
Goudet, John, 80; implicated in the

smuggling of Lustrings, 81-3
Government securities, companies for

dealing in, 446, 447
Gracechurch Street, 11, 279
Grand American Fishery, 449

— Dispensary, The, 453

— Fishery, The, 445
Gray, Mr, glazier, 393

— William, his water supply undertaking
(1646), 34

Great Brewery, The, 174

— Britain, company to encourage the
manufacture of, 445

— James, The, 457

— Kussell Street, 115

Green Lamp, The, Downing Street, 894
Greenland companies, 123, 130-2, 463, 476,

477
Green Street, 13

Grenado shells, invention for making, 111
Gresham, Sir Thomas, 496
Grigsby, John, accountant of the South

Sea company, 345
Grub Street, 13
Guernsey, Linen and Paper company in,

71, 474
Guiana company (1619), 468
Guildhall, 392, 394
Guinea, 416

— company (1618), 468

— - (1631), 470
Guiscard, Marquis de, 295

Gulston, William, his water supply under-
taking, 33

Gum Arabic, trade in, 450

Gunpowder, works in Scotland, 129, 193;
import prohibited, 194

Guns, company for making, 105; manu-
facture in Scotland, 194

552

Index

Hackney, 12, 13, 44; water supply from,

3, 4
Haddington, woollen manufacture at, 472
Hagar, George, 65; his paper-making

company, 63; invention for making

waterproof cloth, 120
Hair, companies for trading in, 452, 454
Hale, Charles and Thomas, purchase the

milled lead company, 107, 473

— William, undertaker of the Friendly
Society, 378, 379

Half Moon Tavern, 394, 450, 453
Halley, Edmund, investigations concerning

the expectation of life, 367
Hamburg, fire insurance in, 372
Hamilton, linen industry at, 169

— James, of Little Earnock, his manu-
facture of paper and playing-cards, 182

Hampstead, 5 ; springs at, 4 ; water supply
of, 8

— Aqueducts, 12, 13, 15, 18, 26, 27, 419,
420, 476, 477; account of, 3-10; office
destroyed by fire, 7; acquired by the
New Eiver company, 30

— Heath, 4; well sunk on, 8
Hanaper of the Chancery, 491, 492
Hand and Glove, Covent Garden, 394

— — Heart Society, 393

— — Sun Fire Office, 457

— in Hand Society (1696), 373, 379
Hanover, subsidies to the Elector, 296;

import of timber from, 456

— Coffee House, 453, 455, 456
Hardware, companies formed in Scotland,

129; manufacture at Glasgow, 186, 188

Hare, skins used in hat-making, 162

Hargreave's Coffee House, 393

Harley, Robert, 1st Earl of Oxford, his
administration, 293; proposes the found-
ing of the South Sea company, 294;
stabbed by the Marquis de Guiscard, 295 ;
fall of his ministry, 298

Hartshorn Lane, pumping house at, 33

Hawes, Francis, South Sea director, 338,
341 ; his severe punishment, 345, 346

Hawkins, William, outlay and profits of
his voyages, 501, 502, 504, 506

Hay, company to supply London with, 457

— Charles, his glass monopoly, 189

— Sir John, his patent for making glass,
124

Hayes, Israel, 5

Haymarket, water supply, 418

Heathcote, Sir Gilbert, his financial pros-
perity, 216; retort on the South Sea
company, 327

Hemming, Edmund, inventor of the Light
Royal, 53, 55

Hemp, companies for growing and import-
ing, 451

Henrietta Island, plantation, 470

— Street (Covent Garden), 72

Henry IV. King of France, loan to, 502

— VIII. King of England, debt incurred
during his reign, 499, 500

Hereditary Society, 393

Heriot's Bridge, white-paper warehouse at,

183
Hertfordshire, 18; proposals to convey

water from, 25
Heyter, Whitefield, his leather works, 193,

194
Higgs, William, petitions for a charter for

the Charitable Corporation, 380
Highgate, 8

Highway robbery, insurance against, 447
Hill, Aaron, 429; establishes the Beech

Oil company, 115-17

— John, of York, suggestions for a penny
post, 43

Hochstetter, Daniel, association with the

Mines Royal, 463
Hoddesdon, scheme for bringing water

from, 25
Hodgson, John, patent for making salt,

448
Hog, William, of Harcarse, 157 ; his woollen

manufacture, 158, 161
Holdich, see Houlditch
Holland, trading companies in, 102 ; English

books imported from, 184, 185; troops

brought from, 226; insurance business

taken from, 400; company to manufacture

goods for, 456

— John, 5 ; his manufacture of Colchester
baizes, 173 ; founds the Bank of Scotland,
253 ; elected governor, 255

Hollands, company for dealing in, 455

Holmes, Jean, 136

Holy Island company, 456

Honorable and Volontary Societies, 393

Hooke, Sir John, 25

Hookes, Robert, promoter of a glass com-
pany, 110

Hope, Sir Alexander, his gunpowder and
alum partnership, 193, 194

Hopetoun, Lord, his lead mines, 429

Hops, companies for the hop-trade, 451,
457

Horn, company for working horn and ivory
at Leith, 129, 194

Hornsey, parish of, 5, 6

Horses, companies for improving the breed
of, 455, 456

Houblon, family of, 56

Houghton, John, on the City Conduits
company, 13; on the White Paper com-
pany, 67; on the lustring industry, 77;
on the Linen Corporation, 95; on the
Dipping company, 108; on the Glass
company. 111; view of English tapestry
and lacquering, 119 ; on Russian leather,
120; on Bank stock, 207, 211, 216-19;
on the Fire Office, 376

Houlditch, Richard, 315; punishment of,
345

Houndsditch, 15

House-breaking, company for insuring
against, 447

Howard, Charles, engaged in the linen
manufacture, 90, 91; quarrel with Dnpiu,
94

Index

553

Howard, Craven, 33

— Lord, cost of his expedition (1591), 504,
506

— Sir Philip, associated with the Milled-
lead company, 106

Hoxton, 12, 13

Hudson, Elizabeth, petition of, 371, 372

— Marmaduke, his drainage engine, 186,
187

Hudson's Bay company, 50, 393, 457, 472,
473; their business in apprenticeship
insurance, 370

— — House, 393, 457

Huguenots, their arrival benefits the weaving
industry, 90 ; their settlement in Ireland,
102

Hungary, insurrection in, 220

Huntingdon, fens in, 470

Hurt's Coffee House, 393

Hutcheson, Archibald, his conversion
scheme, 298; on the assets of the South
Sea company, 310; a member of the
Committee of Secrecy, 333

Hutchinson, Samuel, 59, 60; invention for
street lighting, 52; floats a company,
opposition of the Light Royal company,
53; secures the City contract, 56; diffi-
culties in obtaining Parliamentary assent,
67,58

Inch of Candle, sale by, 76

Indenture Tripartite, 478, 479

India, interloping expeditions to, 202 ; trade
with, 294, 300

Indigo, great quantity secured on the Island
Voyage, 506

Ink-horns, manufacture at Leith, 194

Insurance, undertaking for effecting insur-
ances, 363-411; list of societies founded
during 1710, 392-4 ; committee of enquiry
into, 400, 402, 404 ; report of the Attorney
General, 401 ; see also Apprentices, Births,
Chastity, Children, Fire Insurance, Life
Insurance, Marriage, Rum-drinking

Interest, fluctuations in the 17th century,
200

Inventions, pumping engines, 4, 11, 35,
186, 187, 418; postmarks, 48; street-
lighting, 52, 53, 55; paper-making, 71;
stamping linen, 100; gun-casting, 109;
oil extraction, 115; lacquering and
tanning, 119; waterproof cloth, 120;
salt manufacture, 448 ; drying malt, 454 ;
starch manufacture, 457

Ipswich, lustring industry at, 78 ; settlement
of French weavers at, 90

Ireland, postal service to, 41; textile in-
dustries in, 98-104, 457; increase of the
linen manufacture, 101-4; woollen trade
in, 156 ; sale of forfeited estates, 436, 437 ;
opposition of Irish Parliament to the
Sword Blade Company, 438, 439 ; company
for land-drainage in, 452; adventurers
for lands in, 470 ; revenue and expenditure,
494; cost of rebellions in, 499, 505, 527

Irish Lands, 437

Irish Linen Corporation (1691), 92, 93,

98-100
Irish manufactures, 202
Irish Pale, 438

Irish Paper company (1690), 71
Iron, production in Scotland, 129; Scottish

industries related to iron and steel, 186-8 ;

iron works started by the York Buildings

company, 429, 430; companies engaged

in the iron industry, 449, 453, 455, 456,

476
Ironmongers' Lane, 394
Island Voyage, outlay and returns, 506, 527
Islington, 12, 13, 44; New River reservoir

at, 20
Italy, early instances of bottomry in, 364
Ivory, manufacture of articles at Leith, 129,

194

Jacobites, 283 ; effect of rumours on stocks,
222 ; distribution of Jacobite medals, 229 ;
activity of, 233, 293; defeated at Preston,
233 ; retreat from Perth, 234 ; urge enquiry
into the South Sea company, 332
Jamaica, loss of Jamaica ships, 407
James I., 18, 24, 118, 367, 509; share in the
New River company, 20, 22

— II., 73, 75; extraordinary decision affect-
ing the Friendly Society and Fire Otfice,
376-8; finances in his reign, 533-42

— VI. of Scotland, industrial conditions in
Scotland during his reign, 123; subsidy
to, 502, 508

Janssen, Sir Theodore, fined at the instance
of the White Paper company, 64; value
of his estate, 344; punishment of, 345

Japan Warehouse, 72

Jekyll, Sir Joseph, on the South Sea
company, 331, 333; a member of the
Committee of Secrecy, 334

Jenkins, George, life insurance scheme, 368

Jersey and Guernsey Linen and Paper
company (1691), 71, 474

Jerusalem Coffee House, 453

John's Coffee House, 445, 446, 448-50,
456

Joy, Charles, South Sea director, his punish-
ment, 345

Joynes, C, his starch patent, 457

Joyous Entry, statutes of the, 335

Just and Amicable Societies, 393

Kathai company, 464

Keats' malt and hop patent, 457

Kendal, Duchess of, implicated in the South
Sea enquiry, 336

Kentish Town, water supply, 6

Keymor, John, recommendations for secur-
ing foreign trade, 123

Kilkenny, state of weaving in, 102

King, Archbishop, opposition to the linen
industry in Ireland, 103; on proposed
fire insurance company in Dublin, 374

— Charles, on the wages of English and
French weavers, 76

— Street, 6, 13

35—5

554

Index

King Street, Glasgow, 136
King's Arms Tavern, 450

— Clog, definition, 24

— Dykes, 34

— Head, St Clement's Court, 394
Court, 393

Tavern, 452

— Mills, Byfleet, 64

— shares, 24

Kintail, Spanish troops landed at, 237
Kirkmichael, Pretender's standard raised

at, 233
Knight, Robert (cashier of the South Sea

company), 315, 441, 442; examination

and flight, 335, 343; evidence against,

336, 337, 340, 341

— Robinson, 441

Knives, manufacture at Glasgow, 188

Lace, companies for dealing in, 455
Laconia company (1629), 470
Lacquering company (1693), 118, 119
Lamb, Charles, on the South Sea House, 422
Lambe, Samuel, proposal for a bank, 201
Lambert, Sir John, South Sea director,
punishment of, 345 ; his timber and land
scheme, 457
Lambeth, postal service, 44
Lancashire, linen weavers in, 97; company

for cotton manufacture, 452
Lancaster, Duchy of, 491, 492, 494
Land, development scheme of the York
Buildings company, 422; Sword Blade
company's speculation, 436-40; com-
panies for dealing in, 454-7
Land Banks, 208, 213, 246-52, 267, 296,
478, 479 ; schemes by Hugh Chamberlain
and Jas. Armour, 260-2

— Credit, office of, 478, 479

— Tax, resolution of the House of
Commons, 225

Lapis lazuli, found in Tobago, 417

Law, John, his financial schemes, 265-7,
298-301, 314, 352

Lawn, company to deal in, 455

Lea, river, proposed water supply from, 18;
New River company supplied from, 28

Lead, milled lead company, 105-7; used
for roofing and sheathing ships, 107;
mines developed by the York Buildings
company, 429 ; companies for mining and
smelting, 453, 458, 474, 476

Leather, Russia-leather company (1691),
118-20; company for stamping leather
(Scottish), 129; Scottish leather works,
193, 194

Le Blanc, Paul, engaged in polishing mirror-
glass, 191

Leechmere, Nicholas, statement on the
public debts, 299

Leicester Square, 13

Leith, soap manufactory at, 124, 130;
manufacture of wool-card and glass at,
128, 189; saw-mills at, 129, 193, 195;
sugar-refiners sued by the crown, 137;
wool-card manufacture (1663), 176-80

Leith combmakers, 193, 194

— Walk, French weavers at, 163

— Wynd, 164, 169

Letters, conveyance of, aee General Post^

Penny Post, Postal Service
Levant company, 199, 464, 465
Liberal society, 393
Life, expectation of, 366-8

— Insurance, early history, 366; account
of life insurance undertakings, 389-95?
list of societies in 1710, 391-4

Lighting Companies, 52-60

Light Royal (1687-94), account of, 53-9

Lilley, John, shareholder in the Convex
Lights, 58

Lime, use forbidden in bleaching linen, 162

Lindsey Level, 470

Linen, manufacture in Jersey and Guernsey
(1691), 71, 474; King's and Queen's
Corporation (England) (1690), 90-7, 474;
sales at the old African House, 93 ; import
from France, 97 ; Irish Corporation (1691),
92, 98-100, 474; development of the
Irish manufacture, 101-4, 156; value of
machinery, 102 ; trade with Spain, 104 ;
John Corse's manufacture, 158; import
forbidden, 162; Scots Linen Manufacture
(1693), 128, 129, 162-9, 256, 476, 477;
enactments to encourage the Scottish
industry, 163; other linen companies,
449, 450

Lisburn, Louis Crommelin settles at, 102

Little, John, 145

— Piazza, Covent Garden, 394

— Picardy, 163

Liverpool, water supply, 36, 455

Lloyd's Coffee House, 449; establishment

of, 365
Loans, various methods of raising money
by the State, 288-90; South Sea company's
loans on stock, 317-21, 323; companies
for lending money, 380, 450, 451, 455.
456
"Locrums," sale of, 94
Loftingh, John, his drainage engine, 474
Logan's Close, Leith, premises of Linen

Corporation at, 167
Lombards, marine insurance practised by,

364
Lombard Street, 13, 445; fire in, 374
London, water supply, 8-33 ; powers obtained
by the Corporation, 18, 19; population
in 1590 and 1636, 18, 24; inconvenience
caused by re-laying of water-mains, 26,
27; Common Council establish a postal
service to Scotland, 39 ; Penny Post
established, 43; street lighting, 52-60;
glass manufacture at, 189; Corporation's
insurance scheme, 375, 380; companies-
for cleansing and paving, 454, 455 ; coal-
supply company, 455

— Assurance (1720), 365, 396, 399, 400,
403-11, 480

— Bridge, pumping machinery at, 11, 12,
15, 16 ; rebuilding of, 16, 30; use of arches
for generating power, 33

Index

565

London Bridge Water Works (1582), 11,

12, 25, 419, 420
company (1703), 15-17, 27, 30,

33, 476, 477

— Charitable Society, 393

— Coffee House, 394

— Insurers, company of, .see Sun Fire
Office

upon lives, company of (1709), 394,

395, 480, 481

— Stone, 380, 393

Coffee House, 455

Long, John, 117, 457

— Parliament, 41

Longueville, Henry, 64; prosecuted for

smuggling lustrings, 83
Looking-glass, company for making, 454
Lords, House of, 58, 59, 65, 237, 335, 337,
340-2, 345, 402; on the woollen trade,
101 ; investigate the affairs of the South
Sea company, 343, 344 ; Calendar of MSS. ,
486

— of Session, loan of, 169

— of the Exchequer, 177
Lothbury, 13

Lotteries, 246; capital raised by, 25, 427;

used and encouraged by the State, 290,

301, 352; company to assure tickets,

445
Lottery, Lacquering company dispose of

goods by, 119

— Loan, conversion of prizes, 311
Louis XIV., 228

Loyal Societies (various), 393
Ludgate, 120

— Hill, 13

— Street, 13

Lustring company (1688-1720), 171, 449,
474; account of, 73-89; its association
with the Sun Fire Office, 386, 387

— House, 76

Lustrings, Lutes or Lutestrings, French
workmen discharged, 76; importation
forbidden, 76, 84, 86; production and
cost, 78, 79; duty on foreign, 80; profits
of the manufacture, 86, 87

Luttrell, Narcissus, on the Linen corpora-
tion, 92 ; on Bank stock, 215, 217, 218,
226; on Barbon's and Briscoe's Land
banks, 251

Luxury, restrictions in Scotland, 127, 128,
170-2

"Lye-money," 266, 267

Ly ell's woollen manufacture, at Gairdin,
158, 162

Lyon, whaling ship, 131

Lyons, weavers jealous of trade secrets, 74 ;
depression of the silk industry, 83

Lyon's Inn, 393

MacGrigor, Ewan, manager of the Leith
wool-card manufactory, 179

M^Iver, Evander, leases the mills of the
White Paper company, 185

M^'Kenzie, Colling, payment by the New-
mills company, 147

Mackintosh, Eobert, governor of the York

Buildings company, 432
M'^Nair, Robert, buys the Easter Sugar

Work, 136
M^Ure, John, on the Greenland fishery,

132 ; on the Glasgow Sugar Works, 134-6 ;

his View of Gkisgow, 174, 175
Madder, company to plant and manufacture,

453
Madre de Dios, prize, its value, 506
Magazines, 467

Maids, company for transporting, 466, 467
Mainwaring, Edward, water supply schemes,

— Philip, his water company at Chester, 34
Malplaquet, battle of, 228

Malt, company for drying, 454; malt and

hop patent, 457
Malyn, William, partner in the undertaking

for reducing postal rates, 40
Manchester-stuffs, company for making,

455
Manley, Capt. John, farmer of the inland

posts, 41 ; takes forcible possession, 42
Manor, comparison with crown finances,

487
Manufacture, company to encourage, 445
Manufacturing companies, 63-192
Mar, Earl of, raises the Pretender's standard

at Kirkmichael, 233
Marble, company for working, 456
Marchant, Marchmont or Merchant, Hugh,

his water company, 31, 33
Marine Coffee House, 445-7, 451, 452, 457

— Insurance, 445, 448, 451, 480; origin of,
363, 364 ; account of companies, 396-411

Marlborough, Duke of, dismissal, 230
Marriage, insurance on, 369-72, 392-4
Martyn, Thomas, his lacquering patent, 119
Mary, Queen, 495; revenue in her reign,

493

of Scots, 504, 522, 523

Marylebone, 12, 13, 15

Massachusetts Bay company (1628), 470,

471
Masts, import of, 452, 456
Matthews, William, on the outlay of the

New River company, 21
Mauld, Patrick, of Panmure, his soap and

fishing monopoly, 124, 130
May, Isle of, 450

Medicines, cheap supply for the poor, 453
Mediterranean, 236; coral fishery in, 452
Meikle, John, his bell and cannon foundry,

186, 187
Mercers' company, insurance scheme (1698),

368, 380, 389

— Hall, 227, 423, 445-8

Marine company (1717), see Boyal

Exchange
Merchant, Hugh, see Marchant

— Adventurers, 199, 462, 463
Mercury, company for solidifying, 457
Merioneth, mining in, 472

Metals, companies engaged in manufactures
dealing with, 105-9

556

Index

Middle Ages, usury in the, 364

Middlesex, 18

Middleton, Hugh, 22, 24, 468, 469 ; under-
takes the New River scheme, 19 ; appeals
to Jauies I. for help, 20, 21 ; acquires the
king's moiety, 24, 469

Miege, Guy, on the Convex Lights, 60

Milled-lead adventure, 453

— company (1670), 472, 473; account of,
105-8

Milhngton, Sir Thomas, shareholder in the

Convex Lights, 58
Million, Henry, associated with Dupin in

the Unen industry, 90

— Bank, 208, 213, 220, 223, 269, 294, 437,
478, 479 ; history of, 275-87

House, 279

— Lottery Loan, 275-8, 283

Mine Adventurers company, 480, 481
Mineral and Battery Works, 176, 396-8,

406, 421, 423, 446, 464, 465, 480. 481
Mines Eoyal, 387, 396-8, 406, 421, 423,

446, 462, 463, 473, 480, 481

of Wales, 463

Mining, Scottish mining industries, 129,

186, 187; mining companies, 464, 472,

473, 476, 477
Minories, 15

Mirrors, import into Scotland, 191
Mitre Tavern, 458

*' Mohawks," reports concerning, 283
Molesworth, Lord, altercation with Craggs,

333
Molyneux, William, on the Irish linen

trade, 101
Money, scarcity of, 203, 209 ; company for

remitting, 449
Monk, Gen., takes Dundee, 126
Mons Jidei, 201

— negotiationis, 200

— pietatis, 200

— recuperationis, 201

Monson, Sir William, on Howard's cruise,

506
Montague, Earl of, his tapestry patent, 118

— Street, 115

Montgomery (James), partner in the South
Sugar House, 136 ; proposal to start glass
and soap manufactory at Glasgow, 191,
192

— Robert, partner in the South Sugar
House, 136

— William, proposes a porcelain manu-
facture at Glasgow, 195

Monthly Society of Insurance, 393
Montrose, 190, 256

Moore, Arthur, association with the Convex
Lights, 57-9

— Sir Cleave, proposal for Liverpool water
supply, 36

Moorfields, 13

Mops, import of materials for, 454
Moray, Robert, see Murray
Morice, family of, their water works, 11,
12

— Peter, invents a force pump, 11

Morison, William, of Prestongrange, his

glass bottle manufactory, 190, 191
Morison's Haven, bottle and glass manu-
factory at, 190, 191
Mortlake, tapestry manufacture at, 118, 119
Mulford's Coffee House, 450, 453
Murray, Sir Alexander, of Stanhope, his
mines, 429

— David, investigation concerning the York
Buildings company, 433

— Robert, his association with the Penny
Post, establishes a rival office, 46, 47

Muscovy company, see Russia company
Muslin, company for making, 452
Musselburgh, woollen manufacture at, 158,
159, 161

— company, 157
Muswell Hill, springs at, 4
Myddelton, Hugh, see Middleton

Nag's Head Court, 279
Naked Bay and Mitre, 445
Nando's Coffee House, 449
National Bank of Credit, 202

— Debt, its reduction considered by Parlia-
ment, 234; growth of, 288; its conversion,
314, 346

— Insurance Office, 294

— Land Bank, 246, 250, 251

_ of England, 246, 251, 252

Native Manufactures, society for improving,

118
Naturalization, offered to skilled foreigners

settling in Scotland, 126, 128
Naunton, Sir Robert, on the personal

expenditure of Elizabeth, 498
Navy, increase of, 236; companies for

victualling, 452, 453; expenditure in

reign of Elizabeth, 495, 500-6

— Bills, 295, 297

— Board, 107

— Office, 346

Neale, Thomas, promoter of the Shadwell
water company, 31; petitions to supply
Southwark, 33

— — invention for making papers, 71;
project for making steel, 109

Neath, mineral adventurers of, 458
Necessary-houses, company for emptying,

447
Negroes, contract to supply South America,

298
Netherlands, purchase of munitions in, 496 ;

war expenditure in, 505
New Britannia Company, 449, 450

— Caledonia, Darien company's expedition
to, 257

Newcastle- on -Tyne, 436; water supply, 34,
35, 472; manufacture of glass at, 189,
190

New England, fishing company for, 451;
plantation of, 468, 469

Coffee House, 449

Newest and Best Society, 393

Newfoundland, fishery companies, 449, 451

Newgate Street, 119, 393

Index

557

Newhaven, rope work at, 174

— expedition, cost of, 497, 498, 527
NewmiUs company (1681-1713), 164, 172,

174, 177, 178, 184, 193, 472, 473; history
of, 125, 126, 138-58 ; making of stockings
by, 173 ; effect of Darien collapse, 259
New Plymouth company, 468, 469

— River, completion of the, 4

company, 5, 9, 12-16, 28, 33, 50, 419,

420, 468, 469; account of, 18-31; takes
over the works of the York Buildings
company, 433

— Scotland company, 468, 469

— Street, 393; Sword Blade company's
warehouse in, 436

Nicholas Lane, 457
Noble and Honest Society, 393
Norfolk's Rebellion, 497, 498, 527
Normanby, Marquis of, action concerning
the Orphans' Bill, 58; he is exonerated,
59
Norman Conquest, water supply at the

time of, 3
Northamptonshire, fens in, 470
North-mills, woollen manufacture, 158
North Sugar House, 136
Northumberland, estates in, 424
North West Passage, adventurers to the,

464
Norway, import of timber from, 449
Norwich Union, absorbs the Amicable

Society, 391
Notaries, company of, claims the registra-
tion of insurance pohcies, 364
Nova Scotia, baronets of, 469

company, 468, 469

Noy, William, fishing association, 471
Nuptial office, 393

Occasion of Scotland's Decay in Trade, 267
Office of Insurance on Marriages, 393

— at Bell Court, Fleet Street, 393

— in King's Head Court, Petticoat Lane,
393

— at St Martin's Court, 393

— over against St Olave's Church, South-
wark, 393

— at Mr Hargreave's Coffee House, 393

— at the Cow's Face, Crooked Lane, 393

— at Bolt Court, 393

— kept by Mr Simpson, goldsmith, 393

— kept by Mr Gray, 393

— at the Bunch of Grapes, 393

— at Bangor Court, St Andrew's Church,
393

Oil, companies for its production, 115-17,
457; for use in soap industry, 131;
extracted from seeds, 162, 457; Long's
patent, 457

— Annuity Office, 115
Old African House, 93

— Bailey, 13, 120
Oldbome, river, 3
Old Glass House, 113

— Insurance, 480

— Office of Insuring Marriages, 393

Old Plough, Strand, 394

O'Neil's Rebellion, 497, 527

Only Lawful and Perpetual office, 393

Onslow, Lord, his insurance scheme, see

Royal Exchange
Onslow's Bubble, or Onslow's Insurance,

see Royal Exchange
Ordnance, company for making guns and

ordnance, 105
Original and Beneficial Society, 393

— Beneficial Society, 392

— Loyal Society, 392

Orinoco, river, 295 ; trading company, 452

Orleans, Duke of, 299

Ormiston, Joseph, his silk undertaking,

169-70; engaged in the cloth trade, 172
Ormonde, Marquis of, his development

schemes for Ireland, 98
Orphans' Act, 15

— Bank, 208

— Fund, 208 ; its mismanagement, 12 ;
condition of its finances, 54

Ostrich feathers, 450

Oudenarde, battle of, effect on the stock-
market, 226

Out-ropers' Office, 119, 277

Overall, Edmund, promoter of a fire in-
surance company, 446

Oxenbridge, Clement, his postal partner-
ship, 39-42

Pacific, exploited by Spain, 294; Drake's
expedition to, 501, 502

Paddington, 12, 13, 420; springs near, 3

Pallavicino, loan to Queen Elizabeth, 502,
508

Pall Mall, 13

Palsgrave, near Temple Bar, 393

Pandon Bank, 34

Panmure, York Buildings company's estates
at, 429

Pantiles, company for making, 453

Panton Street, 13

Pape, Robert, master of the glass works at
Leith, 189

Paper, White Paper and other companies,
63-72, 167, 181, 457, 474, 475, 478;
import prohibited, 65; duties on and
quantity produced, 68, 69; patent for
manufacture, 90 ; manufacture in Scot-
land, 124, 129; Scots White Paper
company, 181-5; proposed combination,
452

Parcels, conveyance of, see Postal Service

Parchment, tax on, 68

Park, William, attempt to start a comb
manufactory, 195

Parliament, South Sea enquiry, 331-46;
insurance and fishery enquiry, 400, 402,
404; enquiry into the York Buildings
company, 430, 431

Passaro, Spanish fleet defeated at, 236

Pasteboard, tax on, 68; company for
making, 453

Patents, a source of revenue to the State,
199

558

Index

Paternoster Kow, 393

Paterson, William, 246, 267; promotes the
Hampstead Aqueducts, 5 ; liabilities to
the Darien company, 7 ; proposal for
establishing the Bank of England accep-
ted, 204, 205 ; annoyance at the foundation
of the Bank of Scotland, 253

Paul's Work, Edinburgh, woollen manu-
facture at, 158, 159, 161; Scots linen
manufacture there, 164, 169

Paving, companies for paving and cleansing
the streets of London, 454, 455

Pearls, to be brought from Tobago, 417

Pease, Robert, of Hull, invention for
extracting vegetable oil, 115

Pembroke, Lord, fishing association, 471

Pennsylvania Coffee House, 394, 453

— Society, 451

Penny Post (1680-2), history of the under-
taking, 43-51 ; see also General Post,
Postal Service

Pepper, annual payment to the Bishop of
Westminster, 4

Perpetual Insurance Office, 393

Perry, Col. John, his paper company
(1709), 71, 72

Perth, Jacobites retreat from, 234

Petticoat Lane, 393

Petty, Sir William, investigations as to
estimating population, 367

— Dorothy, a successful insurance director,
392

Pewterers' Hall, 445

Phoenix, ship, sheathed with lead, 106

Phoenix Fire Office, see Fire Office

Piccadilly, water supply, 13, 418, 420

Piedmont, silk imported from, 77

Pilkin's Coffee House, 393

Pins, manufacture at Glasgow and Aberdeen,

188
Pitch, import of, 452 ; company for making

English, 453
Plaiding, export from Aberdeen, 150
Plantations, woollen goods for, 456
Plate, proposal to coin money from, 266,

267 ; company for lending money on, 450
Platen, Countess of, implicated in the

South Sea company, 336
Plate-wrecks, 246
Playing-cards, Peter Bruce's monopoly, 181,

182
Political Society at Bolt Court, 393

— — — Finch Lane, 393

Pons, John, his calico-printing patent, 98,

100
Pontack's receipts, 457
Poor, charitable corporation for relief of,

373, 380, 428, 429, 480, 481
Pope's Head Tavern, 454, 456
Population, increase in London, 18, 24
Porcelain, works at Glasgow, 193, 195
Portland, Lord, fishing association, 471
Port Royal, 458
Portsmouth, garrison of, 495
Portugal, companies for trade with, 448, 450

— Voyage (1589), 501, 502, 527

Postal service, companies for the conveyance
of letters and parcels, 39-51 ; struggle
between rival undertakings, 40, 41; re-
venue obtained from the Post Office, 43 ;
insurance of letters and parcels, 43, 44 ;
see also General Post, Penny Post
Post-marks, early use of, 48
Potash, for manufacture of soap, 131
Pottery, Scottish pottery company, 129
Poultry, 13

— Compter, 12

Povey, Charles, 481; his insurance offices,
371, 374 ; scheme for insurance of goods,
379; founds the Exchange Fire Offices,
381; terms of transfer to the company,
382, 383, 385 ; on the profits of the Siin
Office, 386 ; founds the Traders' Exchange
House Office, 390

— Richard, engaged in the casting of ord-
nance, 109

Poyntz, Capt., his company for planting

Tobago, 415-17, 474
Pratt, widow, 392, 393
Preston, defeat of the Jacobites at, 233
Prestongrange, 190, 192
Pretender (James Francis Edward), rumour

concerning, 223 ; lands in Scotland, 233 ;

re-embarks, 234; received in Spain, 237
Price, Sir Carbery, his silver and lead

mining company, 474

— F. C. H., Handbook of London Bankers,
referred to, 454

Prices, rise in, 488, 499

Prideaux, Edmund, his postal monopoly,

39-42
Printing company, 457
Privy Council, 376 ; order concerning water-

(Scotland), 125, 127, 128, 130, 134,

140, 144, 151, 152, 160, 163, 168, 169,
170, 174, 177, 178, 181-4, 188-94, 262,
263; order concerning Flemish weavers,
124; acts for encouraging trade, 138;
decrees against import of cloth, 146, 147 ;
suspends the Edinburgh Gazette and the
Gourant, 185

— Seals, loans on, 497

"Prizes," in lottery loan of 1710, 309;
conversion of, 311

— (naval), revenue from sale of, 489, 492
Profitable and Equitable Society, 393

— — most Equitable Society, 393

— Society, 393

Protestants, financial assistance given to,

500
Providence Island, company for plantation

of, 470
Public accounts, report of Commissioners,

231
" Public Treasury," for lending money, 456
Puckle, Thomas, invention of gun-casting,

109
Pumping engines, steam pumping engine

used by York Buildings company, 429 ;

two steam engines used by the Shadwell

company, 32

Index

559

Queen's Road, 232

Queen Street, 6; sales of paper in, 67

Quicksilver, company for solidifying, 457

Rabbit-skins, used in hat-making, 162
Rags, supply for paper-making, 65, 67, 68,

72, 181, 184; export prohibited, 66; not

to be used for candle-wicks, 181
Rainbow Coffee House, 372, 445-7, 454
Raleigh, Sir Walter, his expedition, 504
Ram, Stephen, Ram's Insurance, Ram and

Colebrook's Insurance, 396, 399, 400, 445;

becomes the London Assurance (1720),

403-11, 480
Ranue, Hilary, governor of the Lustring

company, 84, 86
Rape oil, used for street lighting, 56
Ratcliffe Highway, 393
Raymond, Col., punishment of, 345
Read, Samuel, value of his estate, 344
Record Office, 486
Red Lyon, Minories, 393
Reeve, John, a partner in the Convex

Lights, 53
Relton, F. B., on the Phoenix Fire Office,

377; on the Exchange Fire Offices, 381;

on the Lustring company and the Sun

Fire Office, 386, 387
Renforces, see Lustrings
Revenue, sources of State revenue, 199;

revenue of EHzabeth, 486-509
Riot Act, read at the House of Commons,

347
Rising Eagle, sheathing of the, 108
Robbery, insurance against, 452
Robertson, Gilbert, of Whitehouse, woollen

manufacture at Musselburgh, 160
Robin's Coffee House, 450
Rob Roy, his estate, 433
Rock Salt company, 453
Rod for a FooVs Back, A, 249
Rogers, J. E. Thorold, his First Nine Years

of the Bank of England, 206; on prices

of Bank stock, 217
Rope, manufacture in Scotland, 129, 173,

174
Ross, General, member of the Committee

of Secrecy, attempt to corrupt, 341, 342
Royal British Society, 393

— Burghs, 257; opposed to the linen
manufacture, 92, 163, 164, 167; agitation
against the Leith wool-card manufactory,
178, 179 ; co-partnery for fishing, 458

— Close, Greenock, 131

— Exchange, 119, 277

— — Insurance Office at the back-
side of, see Fire Office

— — Assurance (1720), 365, 387,
388, 396-8, 400, 402-11, 421, 423, 480,
481

— Fishery company, 427

— — of Great Britain, 445

— Fishing company (Scottish), 128
Rum, sugar-refining and rum-distilling

companies, 133-7 ; production and ex-
port, 135, 136

Rum-drinking, insurance against death

from, 374
Russell, Col. John, proposal for a marine

insurance company, 365

— Roman, partner in the Convex Lights,
53, 58, 59

— Street, 6

Russia, trade with, 202 ; import of tobacco
into, 478

— company, 199, 450, 462, 463

— Leather company, 118-20
Ryswick, peace of, 291

Sacheverell, Dr, prosecution of, 228, 282

Sadlers Hall Insurance company, pur-
chased by the Royal Exchange, 403, 409

Safe Society, 394

Safest and most advantageous office, 392

Sail-cloth, manufacture in Scotland, 129,
173, 174, 454; companies for manufacture,
451, 454

St Alban's Street, 13

St Andrew's Church, 393

St Ann's Court, 6

St Bartholomew's Lane, 13

St Catharine's, 393

St Clements, 393

St Clement's Court, 394

St Giles, 6

St James' Fields, water supply, 418

— — Market, 13

— — Square, 13

St Lawrence Lane, 394
St Martin's Court, 393

— — Lane, pumping houses at, 33

— — le Grand, 393

St Michael, Crooked Lane, 394
St Olave, Southwark, parish of, 33
St Olave's Church, Southwark, 393, 394
St Pancras, parish of, 5
St Paul's Cathedral, public thanksgiving
in 1713, 231

— — Church Yard, 13

— — Coffee House, 456

— — Water Company, 27

St Saviour, Southwark, parish of, 33

St Sepulchre's, Dublin, 374

St Valentine, naval prize, value of, 506

Salmon Fishery, 449

Salt, salt pans worked by the York Buildings

company, 429, 430 ; salt companies, 448,

453 ; brought from the Isle of May, 450 ;

Droitwich salt works (1689), 474
Salter's Hall, 449, 451
Saltpetre, companies for production, 108, 474
Salt water, company for obtaining fresh

water from, 474
Salutation Tavern, 450-2, 454
Sam's Coffee House, 446, 448-57
Sanders, George, his silk monopoly, 169
Sand-Gate, Newcastle, 34
Santa Cruz, company for settling, 455
Santini, Nicholas, prosecuted for smuggling

lustrings, 83
Savory's Waterworks (about 1708), 32, 33
Savoy, 120; treaty with, 82

560

Index

Savoy, Duke of, prohibition of French

goods, 77
Sawbridge, Jacob, 337, 440, 441 ; evidence
in the South Sea enquiry, 343; punish-
ment of, 345
Saw-mills, at Leith, 129, 193, 195
Schmettau, Samuel, salt invention, 448
Scissors, manufacture at Glasgow, 188
Scot, William, his saw-mill at Leith, 195
Scotland, industrial activity and conditions
in, 36, 123; postal service to, 39; effect
of the Union on the lustring and woollen
industries, 86, 156, 157, 160 ; companies
and manufactures in, 123-95 ; difficulties
of establishing manufactures, 126; certain
imports prohibited, 127; enactments for
encouragement of industries, 128; scarcity
of resources, 170 ; opposition to the
Union, 222; riots in, 223, 224; insur-
rection suppressed, 226; rebellion of 1715,
268, 269, 422; purchase of forfeited
estates in, 421-4 ; lead mines and mining
in, 429, 464 ; sale of estates of the York
Buildings company, 432; expedition to,
496-8; Spanish intrigue in, 504
Scots Linen Manufacture (1693), 92, 95, 96,
128, 129, 159, 162-9, 173, 476, 477

— White Paper Manufactory (1694), 71,
181-5, 478

Scotsmen, whipped for selling linens in

England, 163
Scottish Staple, 123
Scythes, manufacture at Glasgow, 188
Seamen, Amicable Corporation for the

benefit of, 370
Second Intimation to all ingenious People^ 41
Second Profitable Society, 393
Secret service. Queen Elizabeth's outlay on,

499, 504
Secure Society, at the Sheep and Fox, 394

— — at the Hand and Glove, 394
Seeds, company for supplying, 452
Seignoret, Stephen, 74, 76; implicated in

the smuggling of lustrings, 81-3
*' Senex," on the " Soaperie," 132
Serges, manufacture of, 159, 457
Servants, insurance of, 370, 392, 393, 456
Seven Stars, Clare Street, 454
Sewers, scheme for generating power from, 33
Shadwell Water company (1681), 26, 27,

32, 33, 419, 472
Shales, Charles, his marine insurance

company, 401, 445
Shannon, wreck, grantees of, 458
Shaw, Sir John, his fishing company, 132

— Dr W. A., Introductions to Calendars of
Treasury Books, referred to, 485

Sheep and Fox, The, 394

Sheep farming, cause of increase in Ireland,

103, 104
Shepherd, Samuel, promoter of the New

East India company, 83
Sberley, Sir Thomas, 492
Ship, The, Strand, 394

— and Castle, 447-51
Shipbuilding, companies for, 446, 452

Shipping, state of the Scottish industry,
173, 174; sheathing for the preservation
of ships, 105 ; introduction of sheet lead,
106 ; loss of twelve Jamaica ships, 407

Ship Tavern, 449, 451-5

Shotley Bridge, Sword Blade mills at, 436

Shovell, Sir Cloudesley, loss of his fleet, 225

Shrewsbury, Duke of, appointed Lord
Treasurer, 232

Sicily, 236

Silk, Royal Lustring company, 73-89;
value of imports, 73; importation from
Piedmont, 77 ; cost of raw material, 78 ;
great quantities smuggled into England,
80-2; depression in the industry at
Lyons, 83; manufacture in Scotland,
129, 169-72; companies trading in and
producing, 201, 202, 446

Silver, scarcity of coins, 236; mining
companies, 453, 457, 474

Skinners, oppose Heyter's leather company,
194

Skipton, Maj. Gen., pension drawn from
Orphans' Fund, 54

Slave trade, supply of negroes for South
America, 298

Sliford, Thomas, salt patent, 448

Smelting, Scottish partnership, 129

Smith, William, his marriage insurance
scheme, 371, 372

— Sir William, 25
Smithfield, East, 31

Smuggling, carried on extensively in the
silk industry, 80-6, 171 ; smuggling of
wool, 104, 451, 453

Soames, Richard, 27; promotes the City
Conduits, 12, 13; acquires the London
Bridge works, 14; competition with the
New River and York Buildings companies,
26, 420

Soap, manufactures at Leith, 124, 130, 195 ;
protection and success of the Scottish
manufacture, 128, 132; company for
improving the manufacture, 453, 454

"Soaperie," burnt down, 132

Society of Mutual Contributors, 394

— of Soapers, 130

— without Loss, 394
Soho Square, 6
Somerset House, 393

Somers Islands company, 466, 467

Sorocold, George, his Derby water-supply
scheme, 35

Soulsby, William, his Newcastle water-
supply scheme, 35

South Newington Butts, 44

— Sea company (1711), 212, 230, 235,
238, 258, 272, 276, 285, 286, 367, 425,
440, 442, 480, 481; history of, 288-360;
company for dealing in stock, 454

— — House, 351, 457

— Sugar House, 136, 191
Southwark, proposed water supply from,

22; water supply of, 31, 33

— Waterworks, 30

Spain, effect of Spanish King's health on

Index

561

Bank stock, 216; occupation by French
armies, 220; favourable news from, 229;
war with Britain, 236, 297, 298; war
with Germany, 236; reception of the
Pretender, 237; strained relations with
Britain, 285 ; companies to promote trade
with, 448, 456

Spanish Armada, value of prizes, 501 ; cost
of its defeat, 502

Spelman, Henry, undertaker of the Friendly
Society, 378, 379

Spitalfields, 13, 73

Spruel, John, attempt to break the Leith
wool-card manufacture, 178

Spur Inn, Southwark, 393

Spurroway, Humphry, threatened rivalry
to the Newmills company, 149

Squadroni, The, 265

Stanfield, Sir James, 146 ; promoter of the
Newmills cloth factory, 138 ; his financial
difficulties, 148

Stangape, Charles, see Stanhope

Stanhope, Charles, secretary of the Treasury,
316; evidence concerning, 336-9; his
acquittal, 340; his name altered to
Stangape in the Sword Blade company's
ledgers, 338

— Lord, sudden death in the House of
Lords, 340

Stapleton, John, his brass-making company,
105, 108

Starch, manufacture of, 136; proposed
manufacture at Leith, 195 ; companies
for making, 452, 457

Star Chamber, 508

Steel, the Venetian Steel company, 105;
production in Scotland, 129; Scottish
industries relating to iron and steel, 186-8 ;
company for making, 455

Steelyard, merchants of the, 364

Stepney, 31

Stocking-makers' company, 456

Stockings, manufacture of, 127, 129, 173;
failure to produce machine made, 149

Stock-jobbing, 68, 111, 112, 246, 420;
decline of Linen company assigned to,
96; mentioned by Defoe, 108

Stocks, company for purchasing, 451

Stockwell Street, Glasgow, 136, 175

Stone, company for glazing and painting,
449

Story of an injured Lady, 103

Stow, on the London rivers, 3 ; his Chronicle^
377

Stradling, Edward, his water undertaking, 25

Strand, 13, 33, 120, 392, 418, 420 ; fire in,
374

Straw, company for furnishing London
with, 457

Street Lighting, account of, 52-60 '

Strype, on the quality of London's water,
14 ; reference to the Phoenix Fire Office, 377

Stuart, James Francis Edward (the Pre-
tender), rumour concerning, 223; lands
in Scotland, 233; re-embarks, 234; re-
ceived in Spain, 237

Substantial and Profitable Society, 394

— Society for the Public Good, 394
Sucking-worm engine, 474
Suffolk, fens in, 470

Sugar, works at Glasgow, 128, 129, 133-7;
proposed manufacture at Leith, 195;
companies for importing and refining,
451, 452

— candy, duty on, 135

— canes, company for planting, 467
Sunderland, Lord, granted the tapestry

manufacture at Mortlake, 118

implicated in the South Sea com-
pany's affairs, 316, 336, 337; acquitted,
343

Sun Fire Office (1706), 83, 374, 480, 481;
account of, 381-8

Sunflower Patent, 117, 457

Sun Tavern, 455

Surinam, 416

Surman, Kobert, his evidence at the South
Sea enquiry, 336, 338, 341 ; value of his
estate, 344 ; his punishment, 345

Sutton, William, a paper maker, 64; oppo-
sition to the White Paper company, 65 ;
invention for making waterproof cloth, 120

Swan, The, Strand, 393

— and Hoop Tavern, 453

— — Rummer, 447, 454

— Tavern, 447, 456

— Yard, 392, 393

Sweden, export of cloth to, 156; Swedish

minister implicated in a Jacobite plot, 234
Sweet wines, farm, 508
Swift, Jonathan, an opponent of the Irish

linen industry, 103; on the South Sea

company, 296, 297
Switzerland, woollen goods for, 456
Sword Blade company (1691-1720), 109, 213,

240, 241, 294, 308, 327, 328, 237, 338,

340, 387, 405, 421, 476, 477 ; account of,

435-42
Sword Blade Fire Office, 447
Sylvanus, George, patent for making German

Balls, 120

Tallies, 209-11, 213; money raised by, 288,

289, 291 ; redemption of, 220, 292
Tanning, John Tyzack's invention, 119
Tapestry makers of England (1619-1703),

118-19
Tar, import of, 452; company for making

Enghsh, 453
Taxes, farming of, 199
Templeman's Coffee House, 393
Terra Australis, company for colonizing,

457

— del Fuego, 295

Textile industries, in England, 73-97; in
Ireland, 98-104; in Scotland, 138-75

Thames, river, water supply taken from, 3,
15, 16, 18, 418; becomes unsuitable for
supplying London, 28-9

Thieves, company for preventing and sup-
pressing, 449

Thomas, Dalby, 5

562

Index

Thompson, Bichard, bank founded by, 201,

202
Thomson, Francis, in the undertaking for

reducing postal rates, 40
Threadneedle Street, 13, 394
Three Tuns, The, 447, 450
Timber, to be shipped from Abernethy, 429,

430 ; companies for the timber trade, 449,

451, 452, 456, 457
Tin, mines in Derbyshire and Cornwall, 453

— men, 60

— plates, company for making, 451

— Shop, Newgate Street, 393

Titles, company to purchase disputed titles,

453
Tobacco, import into Kussia, 478

— boxes, manufacture at Glasgow, 188
Tobago company (1683), 415-17, 474
Tom's Coffee House, 379, 445; pumping

stations near, 33
Tonti, Lorenzi, inventor of the tontine

loan, 289
Tontine system, 368, 369

— loan, 289, 291

Tortoise-shell, manufacture of articles at

Leith, 194
Tortuga company, 471
Tottenham Court Koad, 6

Fields, windmill at, 33

Townsend, Lord, friction with George I., 234
Trade, crisis of 1696-7, 84 ; prosperity in

1699-1700, 215; depression in, 282
Traders' Exchange House Ofl&ce for Lives

(1706-7), 371, 390
Treasury Books, Calendar of, 486
Trenchard, Sir John, 5
Trevor, Sir John, Speaker, expelled the

House for accepting a bribe, 57
Trone Church, Edinburgh, 141
True British Societies, 394
Tucker, Samuel, 5
Tudor period, finance of, 486-509
Turner, Elias, 440, 441
Turnpikes, company for farming, 451
Tyburn, water supply from, 3

— Koad, 6

Tyne, river, water supply of Newcastle

from, 34, 35
Tyssen, Francis, 5
Tyzack, John, project for making steel, 109 ;

patent for tanning, 119

Uddart, Nathaniel, his soap factory at
Leith, 124, 130

— Nicol, 124

Ulster, plantations of, 438, 468, 469
Undertaking, company for furnishing

funerals, 447
Undoubted and Profitable Society, King's

Head, Clement's Court, 394

— Profitable Society, Ship, Strand, 394
Union, England and Scotland, 156, 222,

223, 225, 268, 269

— Assurance Society, 380

— Coffee House, 447

— Office, Bishopsgate, 394

Union or Double Hand in Hand Fire Office,
374, 379

— Society, Cheshire Cheese, 394

— — Black Lion, Drury Lane, 394

— — White Lion, Temple Bar, 394
United Amicable Society, 394

— Company of Insurers, 394

— Generous Societies, 394
Unquestionable Society, 394

Usury, effect of legislation against, 257, 258;

position of the Church relative to, 364
Utible Society, 394
Utrecht, Peace of, 231, 297

Vegetable oils, production of, 115-17

Vellum, tax on, 68

Venetian Steel company, 105

Vernon, Thomas, his attempt to corrupt

General Ross, 341, 342
Victualling and Transport debt, 296
View of Glasgow, 134
Villa Viciosa, reverse at, 229, 230
Vincent, Samuel, his fire office, 375
Vine, The, Newgate Street, 393

— Street, 394

— Tavern, 453
Virginia, company for transporting maids

to, 466, 467; glass furnace in, 466;
various companies, 427, 466, 467

— Coffee House, 448, 450, 452, 455,
457

Vois, Cornelius de, see De Vois
Voluntary Office, 374, 379

Wages, wages paid by the General Post,
47, 48; earnings of weavers, 78, 79:
payment at the Newmills factory, 148
society for assuring mariners their wages,
451

Waghorn's Coffee House, 451, 452, 456-8

Waistcoats, making of, 456

Wales, George, Prince of, interest in the
Lustring company, 88

— Mines Royal of, 463
WaUbrook, the, 3

Waller, Edmund, dealings with the Sword
Blade company, 338, 342

Walpole, Sir Robert, 327; defends the
Bank of England, 238; proposal for
reducing interest on government loans,
235; his fall, 236; scheme for a sinking
fund, 298, 299; opposed to the South
Sea enquiry, 331-3; scheme for re-
adjustment of the company, 347

War betwixt the British Kingdoms con-
sidered, 185

Wardour Street, 6

Warner, Sir T., takes Tobago, 415

Watches, company for furnishing merchants
with, 455

Water engine, company for working a, 451

Waterford, establishment of Huguenot
weavers at, 102

Water-mains, inconvenience caused by use
of wooden mains, 26, 27

Water of Leith, 181

Index

563

Waterproof, invention for making water-
proof cloth, 120
Water Bupply, companies for, 3-36, 418-21,
455, 472, 474, 476, 477; charges, 14;
introduction of iron pipes, 16, 29 ; com-
petition at beginning of 18th century, 26 ;
undertakings in provincial towns, 34-6;
use of elm-wood pipes, 35; engine to
supply Deal, 454
Waterworks Farm, near Newcastle, 35
Watson, Francis, in a milled-lead partner-
ship, 106
Wayne, Ealph, his water engine, 418
Weavers, wages of, 78, 79, 148; value of
looms, 79; supported by the Lustring
company in times of depression, 85;
introduced into Scotland from Flanders
and France, 124, 163

— company, 85 ; relations with the Lustring
company, 73-8, 84, 88

Weems, see Wemyss

Webbe, Capt., his company for colonizing

Terra Auatralis, 457
Wells, river, 3

Wemyss, glass manufacture at, 124, 189, 191
West, Matthew, banker, 454
Wester Sugar Work, 133
West Ham Water company, 33
Westminster, 49
Whale-fishing companies, 128, 131, 132,

447, 450, 463, 467
Wharfs, company for renting, 451
Wheat Sheaf, The, 393
Whitechapel, 13, 15
White Hart, ofifice of the Convex Lights, 60

— Horse, Newgate Street, 119

— Lead company, 453

— Lion, by Temple Bar, 394

— — King Street, 394

— Lyon Tavern, 449

— Paper Makers company, 63-70, 167, 474,
475

Wicar's Coffee House, 451
Widdrington, Northumberland estate of
York Buildings company, 431

Widow Joe's Coffee House, 457
Widows and Orphans' Fund, 446

Society (1698-9), 368, 389-90

Wiel's Coffee House, 451
William, ship, adventurers in, 470
William III., 27, 33, 150, 173, 210, 288, 295,
324, 365, 389, 418; scarcity of money
early in his reign, 203; death, 219;
finances in his reign, 536-9, 542, 643
Williamson, Francis, water engine, 418
Winchester, Marquis of, Treasurer, 496
Windmill Street, 6
Windsor, Dean of, opposition to the White

Paper company, 65, 66
Windus, Edward, partner in the Convex

Lights, 52
Wine, trade in, 202
Wood Street, 42, 46

Wool cards, manufacture at Leith, 128, 176
Woollen industry, jealousy of the linen
trade, 94, 95; discouraged in Ireland,
101, 156; smuggling of wool to France
and Scotland, 104; trade encouraged in
Scotland, 124-7, 138; export forbidden,
152, 155; companies for developing the
industry, 450-4, 456, 472, 473
Wormwood Street, 13
Wrecks, Linen company's petition for
raising wrecks, 95

Yard Heads, 174

Yarmouth, postal service to, 41

Yarnold, William, his water supply ventures

(1697), 35, 473
Yarns, quantity exported from Ireland, 98
Yester, paper mills at, 183
York, James, Duke of, 127; postal revenue

settled on, 42, 45, 47, 49 ; encourages the

Scottish cloth industry, 138
— Buildings company (1665), 13, 26, 27,

29, 418-34, 436, 440, 445, 472, 473
York House, 418
Yorkshire, linen weavers in, 97

Zell, Duke of, subsidies to, 296

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Scott, William Robert

Joint stock companies to
1720
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